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Operating fee invoices out in March

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ALEXANDRIA, Va. (1/30/13)--Federal credit union operating fees is the topic of the National Credit Union Administration's most recent Letter to Federal Credit Union (13-FCU-01); the letter reminds of the agency's action in November that increased the fee for credit unions with more than $1 million by 0.24% and eliminated the fees for those with assets less than or equal to $1 million.

Included with the letter is an NCUA chart intended to help a federal credit union calculate the exact dollar amount of its operating fee. The chart also includes the NCUA web link to the online calculator. The letter also provides insight into the calculation method.

The letter states that federal credit unions with over $1 million in assets will be sent an invoice for the operating fees in March. The operating fee will be based on assets reported Dec. 31, 2012. At the same time, all federally insured credit unions will receive notice of any amount needed to adjust their National Credit Union Share Insurance Fund capitalization deposit to 1% of insured shares.

The NCUA will combine the operating fee and capitalization deposit adjustment into a single payment. That payment is due April 2013, the letter notes.  The agency adds that for federal credit unions signed up to pay via Pay.Gov, no further action is required; payment will occur by April 30.

All others must send payment according to the instructions included with the invoice.

Questions regarding details of the letter should be directed to the NCUA's Office of the Chief Financial Officer at ocfomail@ncua.gov.

Chartway stays with CUNA, opens 'one trade group' discussion

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VIRGINIA BEACH (1/30/13)--The $1.9 billion Chartway FCU based here announced that it is maintaining its membership in the Credit Union National Association and that for the sake of "clarity, consistency and on-point messaging," the credit union system would be better served to be represented by one trade association.

"This is particularly important as it relates to the significant legislative and regulatory opportunities and challenges currently facing the industry," Chartway said in a statement.

Ron Burniske, president/CEO of the 194,885-member Chartway, said that Chartway evaluated both CUNA and the National Association of Federal Credit Unions during the credit union's recent strategic planning process. Based on its value proposition, Chartway decided to align with CUNA.

Burniske acknowledged that both CUNA and NAFCU demonstrate "exceptional work," but "only one trade association is necessary to effectively represent the credit union industry."

Chartway hopes that its relationship with a single trade association will allow more focus to effectively be placed on items that are relative to credit unions of all sizes. Its intention is to create a "proactive, concise single voice that will best represent the industry."

Further, Chartway hopes its decision will "inspire conversation among other credit unions on unifying trade associations to benefit credit unions--which would ultimately be best for credit unions and their members."

CUNA President/CEO Bill Cheney, responding to the Chartway announcement, said, "We appreciate the confidence that Chartway has in CUNA and the leagues, and we are proud to be their advocates."

Cheney added, "Trade association membership is an important decision for any credit union. We believe that the CUNA/League system has the vision, resources and commitment to best represent their interests on both the national and state level."

Chartway has branch locations in Arkansas, Florida, Georgia, New Jersey, North Carolina, Ohio, Rhode Island, Texas, Utah and Virginia and also serves its members through about 4,000 shared-service locations nationwide.

Still time to sign up for Matz, Cordray Feb 5 webinar

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ALEXANDRIA, Va. (1/30/13)--Want to pose your most pressing credit union questions to National Credit Union Administration Chairman Debbie Matz and Consumer Financial Protection Bureau Director Richard Cordray? Participants have just under a week to sign up for a joint, Feb. 5 webinar.

The webinar will feature a broad discussion of the changing environment for financial regulation and consumer protection issues, including the CFPB's recently finalized regulations, proposed rules, and enforcement efforts.

Webinar participants will be able to type in questions about any topic related to the credit union industry or the CFPB during the webinar. They also can submit advance questions at WebinarQuestions@ncua.gov. The subject line of the email should read, "NCUA-CFPB Town Hall."

Use the resource link below to register for the 3 p.m. (ET) webinar.

Coming soon to the GAC: DNC Chair Wasserman Schultz to speak

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WASHINGTON (1/30/13)--Democratic National Committee Chairman and credit union supporter Rep. Debbie Wasserman Schultz (D-Fla.) has added her name to the lineup of 2013 Credit Union National Association Governmental Affairs Conference speakers.

Wasserman Schultz, who has served in the U.S. House since 2005, noted the "key role" that credit unions played in helping the American economy get back up and running, and praised credit unions for filling the lending gap left open by many banks in a 2011 GAC appearance. She also said credit unions must be able to provide the credit that small businesses so desperately need.

This year, she will speak during the morning general session on Feb. 26.

Also on the GAC speaking schedule: Speaker of the House Rep. John Boehner (R-Ohio), credit union champions Sen. Mark Udall (D-Colo.), Rep. Ed Royce (R-Calif.) and Rep. Brad Sherman (D-Calif.) are also slated to speak at the 2013 GAC. House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Majority Whip Kevin McCarthy (R-Calif.), House Financial Services Committee senior member Spencer Bachus (R-Ala.), Rep. Gregory Meeks (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), Rep. Peter King (R-N.Y.) and Rep. Blaine Luetkemeyer (R-Mo.).

CUNA's 2013 GAC will take place Feb. 24-28 at the Washington Convention Center in Washington, D.C. This year's GAC theme, "Powerful Cause, Positive Effect," reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day.

For more information, follow the @CUNAverse twitter hashtag #CUNAGAC. Use the resource link to register for the GAC.

CFPB should revisit 100 transfers-per-year exemption: CUNA

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WASHINGTON (1/30/13)--Noting that "no issue regarding international remittance transfers is more important to credit unions than the exemption level," Credit Union National Association Deputy General Counsel Mary Dunn urged the Consumer Financial Protection Bureau to reconsider the 100 transfer exemption level in a comment letter sent to the agency this week.

Under the final remittance rule published last February, remittance transfer providers will be 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.

The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year. 

Dunn in the comment letter said the CFPB's final remittance rule "should differentiate between entities that are profiting as a result of offering remittance transfers as a business line or a product, as opposed to credit unions that offer international remittance transfers as a service to their members who prefer to conduct their financial business with their credit union." She noted that a number of credit unions lose money, or only charge enough money to cover the costs of providing remittance transfers.

The CUNA comment letter also encouraged the agency to use its exemption authority to shield as many credit unions as possible from the terms of the remittance regulations, and to delay the compliance date for the regulations by at least 12 months. "This approach will help facilitate compliance for credit unions, particularly those that work with corporate credit unions, vendors and other third-parties, while minimizing regulatory burdens on all credit unions," Dunn wrote. The letter also commended the CFPB's decision to delay the effective date of pending remittance transfer regulations.

The agency could also ease the regulatory burden faced by credit unions and other financial institutions by compiling and maintaining its own central database of foreign taxes and recipient institution fees. The agency has proposed requiring each remittance provider to find and maintain this information independently. This approach would prove "incredibly burdensome and costly" for credit unions and other institutions. A single, CFPB-maintained database would benefit credit unions and consumers alike, CUNA said.

The CUNA comment letter also addressed:

  • Liability issues;
  • Fees; and
  • Foreign tax issues.
For the full comment letter, use the resource link.

CUNA watches for credit card surcharge change impact

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WASHINGTON (1/29/13)--New rules that allow retailers to assess "check out" fees or surcharges on credit card purchases took effect in many states on Jan. 27, and the Credit Union National Association is watching to assess how these rules could impact credit unions.

The Electronic Payments Coalition (EPC) has developed this word cloud to demonstrate how various media sources have covered the credit card surcharge issue since Dec. 2012. (EPC Photo)
The surcharge rule change is one result of a 2012 interchange fee class action lawsuit settlement. CUNA has explained that the surcharging aspect of the settlement--as well as the provision that consumer-owned credit unions would see a reduction in interchange revenue--are signs that the settlement does nothing for consumers.

As CUNA President/CEO Bill Cheney explained last year, "We all know that interchange revenue enables credit unions to provide essential and cost-effective credit card services to their consumer members. We also know that the temporary reduction in interchange revenue that credit unions will experience will not likely find its way into the pockets of consumers, but will more likely into those of merchants."

Visa and Mastercard rules previously prohibited merchants from charging surcharges on credit card purchases. The new surcharges could be as high as 4% of a given transaction, and may be charged in 40 states. California, Texas and New York are among the ten states that forbid merchants from assessing surcharges for credit card use.

The surcharges cannot be applied to debit transactions.

Merchants can decide whether or not they want to assess the surcharge. Toys-R-Us and Target are among those that have said they will not charge a credit card fee, NBC News reported. News of the surcharge has received widespread media coverage. (See related story: Retailers' new checkout fees create ruckus in media)

CUNA underscores public policy behind tax status to lawmakers

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WASHINGTON (1/29/13)--Credit Union National Association President/CEO Bill Cheney has had at least 20 meetings recently with federal lawmakers and those meetings have underscored that legislators have a "fairly broad understanding about the public policy reasons for the credit union tax-exemption," Cheney said Monday.

"CUNA has had very positive discussions about the need to protect the credit union tax status," Cheney reported. No legislator CUNA has spoken with has suggested that the credit union tax status is currently on the table as a tax reform or spending issue. However, Cheney emphasized, none have suggested that CUNA should be anything but vigilant on this key issue as tax reform talks move forward and all sorts of ideas are thrown into the discussions.

Preserving the tax status of credit unions is CUNA's top priority and will be the number one issue during CUNA's upcoming Governmental Affairs Conference, which will be held Feb. 24-28. Debt and tax discussions are scheduled to be held on Capitol Hill around March 1 and Cheney said he "could not think of a better time for credit union supporters to be in Washington, in force."

Overall, Cheney said, it has "been interesting to say the least to hear what's on the minds of members and how credit unions are viewed."

CUNA has also found broad agreement on the need to reduce the regulatory burden on credit unions and other smaller financial institutions. "While no one thinks Dodd-Frank will be repealed, many expressed support for efforts moderating its excesses along the lines of last year's CUNA-backed exam fairness bill to scale back regulatory barriers," he said.

Meanwhile on Capitol Hill, the Senate is in session this week and the House is in recess. The Senate is expected to begin consideration of debt ceiling legislation approved last week by the House, and attend to other matters.

CUNA Senior Vice President of Legislative Affairs Ryan Donovan said the Senate Banking Committee could hold its organizational meeting on Feb. 14, and conduct an oversight hearing on Dodd-Frank implementation on the same day. However, he noted, the committee has not released an official schedule.

The House Financial Services Committee is set up and ready to begin its work soon, and could soon take on Consumer Financial Protection Bureau issues. That committee is also set to hear Federal Reserve Chairman Ben Bernanke's regular "Humphrey-Hawkins" testimony in the coming weeks.

NEW: Operating fee invoices will come out in March

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ALEXANDRIA, Va. (1/29/13, UPDATED 11:30 a.m. ET)--Federal credit union (FCU) operating fees is the topic of the National Credit Union Administration's most recent Letter to Federal Credit Union (13-FCU-01); the letter reminds of the agency's action in November that increased the fee for credit unions with more than $1 million by 0.24% and eliminated the fees for those with assets less than or equal to $1 million.

Included with the letter is an NCUA chart intended to help a federal credit union calculate the exact dollar amount of its operating fee. The chart also includes the NCUA web link to the online calculator. The letter also provides insight into the calculation method.

The letter states that FCUs with over $1 million in assets will be sent an invoice for the operating fees in March. The operating fee will be based on assets reported Dec. 31, 2012. At the same time, all federally insured credit unions will receive notice of any amount needed to adjust their National Credit Union Share Insurance Fund capitalization deposit to 1% of insured shares.

The NCUA will combine the operating fee and capitalization deposit adjustment into a single payment. That payment is due April 2013, the letter notes.  The agency adds that for FCUs signed up to pay via Pay.Gov, no further action is required; payment will occur by April 30.

All others must send payment according to the instructions included with the invoice.

Questions regarding details for the letter should be directed to the NCUA's Office of the Chief Financial Officer at ocfomail@ncua.gov.

Banker names MBLs among bills to watch for this year

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WASHINGTON (1/29/13)--In a special slideshow presentation entitled "Eight Banking Bills That Aren't Going Away," American Banker named credit union member business lending (MBL) as number four.

"(T)he business-lending cap is a huge issue for credit unions," so expect the credit union bill to be back, the paper said.

CUNA confirmed as much when it named its top 2013 action priorities.

Earlier this month CUNA announced that along with its top priority of preserving the credit union tax status, CUNA also will pursue charter enhancements this year that improve the operating environment for credit unions.

Two major initiatives that remain as priorities from 2012 are supplemental capital and increased member business lending.  A 2012 House MBL bill had 145 bi-partisan supporters, and a Senate bill had 22. 

In its Jan. 28 piece, American Banker noted that the credit union initiative to increase the MBL cap to 27.5% has "always been a bone of contention" with banks, but acknowledged the bill "is not likely to go away."

CUNA has estimated that the proposed MBL cap increase could inject $13 billion in funds into the economy, creating as many as 140,000 new jobs in the first year following enactment.

CUNA tried to "bring the banks to the table" through much of 2012 to get them to ease their opposition to CUNA-backed MBL  legislation. But as CUNA Executive Vice President of Legislative Affairs John Magill has pointed out, "Despite the boost an increased cap would give the economy, the banks continued their knee-jerk opposition to these credit union bills."

CUNA, the state credit union leagues, and credit unions responded and, as Magill describes it, "made a loud statement" when, late last year, they aggressively opposed the banks' legislation that would have extended the Transaction Account Guarantee (TAG).

In its MBL segment, the Banker noted that the TAG bill failed to pass Congress last year.

WOCCU urges clear international disclosure standards for CUs and members

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LONDON (1/29/13)--The World Council of Credit Unions (WOCCU) has urged an International Accounting Standards Board (IASB) panel to make financial disclosures more succinct and easier to understand.

"Doing so would increase their meaningfulness to credit union members and reduce compliance burdens on credit unions," Michael Edwards, WOCCU vice president and chief counsel, said.

WOCCU made the recommendations at a Monday IASB Discussion Forum on Disclosures in Financial Reporting in London.

Edwards attended the disclosure forum and commented that complex financial disclosures are often impenetrable to people who are not financial professionals, such as most credit union members and small retail investors. He asked the panelists to consider simplifying financial disclosure requirements so that they are easier to prepare and more easily understandable to ordinary people.

"All credit unions would benefit from reduced accounting compliance burdens," WOCCU President/CEO Brian Branch added.

"Easily understandable financial disclosures will be most useful to credit union members in developing countries where shares and deposits are often not protected by savings guarantee schemes and many members do not have a university education," he said.

The panel will report these and other recommendations to IASB within the next two months, WOCCU said.

IASB sets International Financial Reporting Standards (IFRS), which apply to credit unions in a growing number of jurisdictions including Australia, Brazil, and Canada. IASB and the U.S. Financial Accounting Standards Board (FASB) are also in the process of converging IFRS with U.S. Generally Accepted Accounting Principles, which will make U.S. credit unions subject to accounting rules that are the same as IFRS in most respects.

In April 2012, IASB and FASB issued a report predicting that they would jointly issue final accounting standards regarding financial instruments, leases and insurance contracts by mid-2013.

Arrowhead Central CU condition improves under NCUA oversight

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ALEXANDRIA, Va. (1/29/13)--"Things are moving in the right direction" at Arrowhead Central CU, National Credit Union Administration Region II Director Jane Walters said in a Monday release.

That credit union, which has been under agency conservatorship since 2010, posted a 324 basis point improvement in its net worth ratio in 2012. Arrowhead Central's year-end income was $25.5 million, and the credit union held nearly $700 million in assets at the end of 2012.

The NCUA in June 2010 took control of Arrowhead Central, and fired then-CEO Larry Sharp and three other senior-level employees, due to the credit union's declining financial condition.

"Arrowhead has maintained a strong community presence, and we've expanded products and improved service," Walters added.

For the full NCUA release, use the resource link.

CUNA exam survey sees strong CU response

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WASHINGTON (1/28/13)--Well over 1,000 credit unions sent in their federal and state examination stories to the Credit Union National Association in response to CUNA's recent survey request.

In fact, 1,300 respondents took the time to detail their experiences--good, bad and in-between--on this key topic for credit unions.

The CUNA survey asked credit unions to detail their experiences with on-site National Credit Union Administration and state regulatory examinations, and to describe their satisfaction level with both the federal and state examinations process. Credit unions also described the strengths and weaknesses of the examination system.

The information gleaned from the survey responses will help CUNA and the leagues hone their exam issue advocacy efforts.

Results of the survey will be released in time for this year's CUNA Governmental Affairs Conference. The conference is scheduled for Feb. 24-28 in Washington, D.C.

Rep Meeks adds name to 2013 GAC lineup

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WASHINGTON (1/28/13)--House Financial Services Committee member Rep. Gregory Meeks (D-N.Y.) is the latest legislator to join the 2013 Credit Union National Association Governmental Affairs Conference (GAC) lineup.

Meeks is the ranking minority member on the committee's Financial Institutions and Consumer Credit Subcommittee. He was an original co-sponsor of the credit union supplemental capital bill, H.R. 3993, in the 112th Congress. Meeks also co-sponsored legislation that would increase the credit union member business lending cap last year.

He will speak during the morning general session on Feb. 26.

Speaker of the House Rep. John Boehner (R-Ohio), credit union champions Sen. Mark Udall (D-Colo.), Rep. Ed Royce (R-Calif.) and Rep. Brad Sherman (D-Calif.) are also slated to speak at the 2013 GAC. House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Majority Whip Kevin McCarthy (R-Calif.), House Financial Services Committee senior member Spencer Bachus (R-Ala.), Sen. Elizabeth Warren (D-Mass.), Rep. Peter King (R-N.Y.) and Rep. Blaine Luetkemeyer (R-Mo.) are also on the GAC speaking schedule.

More congressional and regulatory speakers will be added to the 2013 GAC lineup in coming weeks.

CUNA's 2013 GAC will take place Feb. 24-28 at the Washington Convention Center in Washington, D.C. This year's GAC theme, "Powerful Cause, Positive Effect," reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day.

For more information, follow the @CUNAverse twitter hashtag #CUNAGAC. Use the resource link to register for the GAC.

Senate student loan bill would allow private debt writeoffs

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WASHINGTON (1/28/13)--Legislation that would treat privately issued student loans in bankruptcy the same as other types of private debt was introduced by a group of senators last week.

The bankruptcy bill, known as the "Fairness for Struggling Students Act of 2013" (S. 114), is sponsored by Sen. Richard Durbin (D-Ill.) and is cosponsored by Sens. Sheldon Whitehouse (D-R.I.), Jack Reed (D-R.l.), Tom Harkin (D-Iowa), Elizabeth Warren (D-Mass.) and Al Franken (D-Minn.). Durbin in a release said the bill would restore the bankruptcy law, as it pertains to private student loans, to the language that was in place before 2005 so that privately issued student loans will once again be dischargeable in bankruptcy like nearly all other forms of private debt.

Government issued or guaranteed student loans have been treated as nondischargeable debt during bankruptcy proceedings since 1978. Legislation that extended these same protections to private student loans was approved in 2005.

A second bill, the "Know Before You Owe Act of 2013" (S. 113), would require schools to counsel students before they take out private student loans and to inform students of any unused federal student aid eligibility. Schools would also need to confirm a student's enrollment status, cost of attendance and estimated federal financial aid assistance before their private student loan can be approved. S. 113 is cosponsored by Durbin, Harkin and Franken.

The Consumer Financial Protection Bureau has noted that student loan debt, which surpassed $1 trillion in 2012, has exceeded credit card debt as the largest source of consumer debt in the U.S. More than $150 billion of this $1 trillion total is comprised of private student loans, and at least $8 billion of these private student loans are in default, the CFPB said.

CUNA estimates that around 300 credit unions currently offer student loans to their members. Credit unions also provide financial education and seminars relating to student lending generally, and encourage students to attend. The CUStudentLoans.org website also provides extensive financial education regarding student lending, through both written information and webinars. The site is powered by Fynanz, a CUNA Strategic Services provider.

ABA targets tax exemption for 2013, CUNA primed to protect

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WASHINGTON (1/28/13)--As if there were any doubts about what the banks are up to this year, an American Bankers Association lobbyist was quoted today by Bloomberg BNA saying that a "chief" goal for banks in 2013 is to push for legislation to change or eliminate the credit union federal tax status.

The article quotes ABA Executive Vice President James Ballentine as saying the group will be talking to federal lawmakers about statutory changes and, if that fails, pushing for congressional hearings, a Government Accountability Office study, or "a variety" of other means to go on the attack.

Protecting the credit union tax exemption tops the Credit Union National Association's list of 2013 priorities.

Under the Federal Credit Union Act of 1934, federal and state-chartered credit unions are exempt from federal income tax because they are cooperatives operated for and by their members, and because credit union shares are essentially members' deposits. The tax status has been re-affirmed periodically by the U.S. Congress and is supported by many lawmakers.

As recently as yesterday, on a call to state credit union league presidents, Credit Union National Association President/CEO Bill Cheney reiterated that preserving the tax status of credit unions is CUNA's top priority and will be the number one issue during CUNA's upcoming Governmental Affairs Conference (GAC) here from Feb. 24-28.

Capitol Hill visits on key credit union issues are at the core of CUNA's GAC, which draws thousands of credit union representatives from across the country to Washington, D.C. each year.

"The congressional agenda for the year is unclear at this point but some expect it will include comprehensive tax reform discussions. As part of that process, the credit union tax status is likely to be examined and could come under significant threat--particularly since we know the banks will continue their paid media and lobbying barrage urging credit union taxation.

"Protecting the credit union tax exemption tops CUNA's list of ten 2013 priorities for good reason," Cheney said.

New services helped AEA FCU improve financial standing in 2012

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ALEXANDRIA, Va. (1/28/13)--New services for members and increased operational efficiency helped AEA FCU post net income and net worth ratio improvements in 2012, the National Credit Union Administration reported Friday.

Total assets held by the Yuma, Ariz., credit union stood at $231 million at the end of 2012. AEA FCU also reported net income of $3.15 million and its net worth ratio improved by 137 basis points during 2012, ending the year at 4.02%.

NCUA Region V Director Elizabeth Whitehead said the NCUA and management "reduced expenses, streamlined operations, retooled infrastructure, introduced an array of new services and continued the process of returning AEA to the core credit union business model" in 2012. "We see significant progress in all of these areas, and we are very pleased with the credit union's positive performance in 2012," she added.

Services introduced in 2012 included:
  • A new home banking website and mobile platform;
  • A suite of checking accounts;
  • A direct auto lending platform; and
  • A fixed-rate Visa credit card program.
AEA also joined the Shared Branching and CO-OP ATM Networks in 2012. This move provided its 42,000 members with 36,800 additional service sites, the NCUA said.

The NCUA placed the credit union into conservatorship in December of 2011, saying that it was not adequately capitalized under standards set forth in the Federal Credit Union Act and had earnings "insufficient to enable it to continue under present management." The agency at that time said the credit union's difficulties sprang from problems in its loan portfolio.

Whitehead said the NCUA hopes to release the credit union from conservatorship in 2013.

OCC sets $10M penalty for BSA violations

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WASHINGTON (1/28/13)--For Bank Secrecy Act (BSA) violations the Office of the Comptroller of the Currency said ranged from late filing of suspicious activity reports (SARs) to instances where SARs failed to adequately explain or identify potential terrorist financing, the agency assessed a $10 million civil money penalty against TCF National Bank, Sioux Falls, S.D.

The OCC announced Friday that its examination of the bank's account and transaction activity covered the time period  between November 2008 and July 2010.

The suspicious activities involved, the OCC said,  primarily consisted of cash transactions" which indicated structuring and wire transfers where the source and purpose of the funds were unknown."

The agency said the penalty follows a cease-and-desist order issued in July 2010 when the bank was directed to correct deficiencies in its BSA and anti-money laundering programs.

The Bank Secrecy Act of 1970 requires financial institutions, including credit unions, to assist the government and law enforcement officials in detecting and preventing money laundering and terrorist financing.

CDFI Fund posts archived training webinars, FAQ

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WASHINGTON (1/28/13)--Interested in applying for financial assistance through U.S. Treasury Community Development Financial Institutions (CDFI) Fund programs? The CDFI Fund has posted archived versions of two training webinars and an updated list of frequently asked questions (FAQ) for those in need of more information..

The webinars and FAQ address the CDFI Program and the Native American CDFI Assistance (NACA) Program.

The Treasury's CDFI Fund helps locally based financial institutions--including credit unions--offer small business, consumer and home loans in communities and populations that lack access to affordable credit. Credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding to help maintain their credit union's presence in the community.

The NACA Program is designed to encourage the creation and strengthening of certified CDFIs that primarily serve Native American, Alaskan Native and Native Hawaiian communities. NACA funds may be used to finance capital or may be provided to financial institutions in the form of technical assistance grants.

The CDFI Fund expects to provide up to $165 million to eligible financial institutions in 2013.

The $165 million will be divided into:

  • $130 million for CDFI Program awards;
  • $12 million for Native American CDFI Assistance (NACA) Program awards; and
  • $23 million for Healthy Food Financing Initiative.
Congress has not yet appropriated funds for the 2013 program rounds. The Obama administration requested $221 million for the CDFI Fund in its suggested 2013 fiscal year budget.

A total of $186,853,456 was awarded to 210 organizations in 2012, representing the highest amount awarded in the CDFI Fund's history.

Twenty-two credit unions received funding through the 2012 CDFI Fund, and four credit unions received NACA Program grants.

For more on the CDFI Fund webinars and FAQ, use the resource link.

Conserved Florida, Texas CUs in improving condition

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ALEXANDRIA, Va. (1/25/13)--Two conserved credit unions, Texans CU and Keys FCU, appear to be recovering under National Credit Union Administration supervision: both posted impressive net worth ratio gains in 2012.

The NCUA on Thursday reported that Texans, which is based in the Dallas metropolitan area, reported a net worth increase of 161 basis points (bp) for the year ended Dec. 31, 2012. The increase brings the credit union's total net worth ratio to 2.68%.

"We are delighted to see the hard work and tough choices made by management pay off like this," said Texas Credit Union League president and CEO Dick Ensweiler.

The credit union held $1.43 billion in assets at the end of 2012, and recorded $24.17 million in net income. NCUA Region IV Director C. Keith Morton said the NCUA is encouraging the credit union to offer "many new product and service enhancements, such as remote deposit capture, online account opening and debit card purchase rewards."

The NCUA placed Texans into conservatorship in April of 2011, citing service and operational issues.

The net worth ratio of Keys FCU of Key West, Fla., increased by 80 bp in 2012. Keys FCU's net worth ratio totaled 3.7% at the end of the year.

The credit union, which voluntarily entered NCUA conservatorship in 2009, also reported $965,714 in net income and $124.2 million in total assets at the end of 2012.

NCUA Region III Director Herb Yolles said the agency has "restructured Keys to provide the members greater access to services and products." Mobile banking and credit cards will be among the new service enhancements offered in 2013, he noted.

"Keys FCU is a good example of a credit union that is on a road to recovery thanks to the support and assistance of many, including the NCUA," Patrick La Pine, president/CEO of the League of Southeastern Credit Unions, said.

For NCUA releases on both credit unions, use the resource links.

GAO: Dodd-Frank implementation is slow-going

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WASHINGTON (1/25/13)--Regulators have made progress in implementing some key reforms required by the Dodd-Frank Wall Street Reform Act, but others remain incomplete, and the effectiveness of some implemented reforms remains to be seen, a new Government Accountability Office (GAO) report notes.

The report examines:
  • The overall status of U.S. financial regulatory reforms arising from Dodd-Frank;
  • Challenges affecting the implementation of these reforms; and
  • Areas that pose continued risk.
While the report does not specifically address the efforts of the National Credit Union Administration, does touch on the progress of the Financial Stability Oversight Council (FSOC), of which NCUA is a member.

The FSOC was established to identify systemic threats, and as noted in the report, has taken steps to carry out its responsibilities. The GAO notes that FSOC members have taken actions to implement some key reforms intended to reduce systemic risk. "For example, FSOC developed--and is currently implementing--a process and criteria to determine whether certain nonbank financial institutions should be designated for supervision. But, to date, no such designations have been made," the GAO said.

Overall, the GAO identified 236 provisions of the Dodd-Frank Act that require regulators to issue rulemakings across nine key areas. As of December 2012, regulators had issued final rules for 48% of these provisions, proposed rules for 29% of these provisions, and not begun the rulemaking process for 23% of these provisions, the GAO noted.

The GAO did not make any new recommendations in the report.

For the full report, use the resource link.

NEW: ABA targets tax exemption for 2013, CUNA primed to protect

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WASHINGTON (1/25/13, UPDATED 11:20 a.m. ET)--As if there were any doubts about what the banks are up to this year, an American Bankers Association  lobbyist was quoted today by Bloomberg BNA  that a "chief" goal for banks in 2013 is to push for legislation to change or eliminate the credit union federal tax status.

The article quotes ABA Executive Vice President James Ballentine as saying the group will be talking to federal lawmakers about statutory changes and, if that fails, pushing for congressional hearings, a Government Accountability Office study, or "a variety" of other means to go on the attack.

Protecting the credit union tax exemption tops the Credit Union National Association's list of 2013 priorities.

Under the Federal Credit Union Act of 1934, federal and state-chartered credit unions are exempt from federal income tax because they are cooperatives operated for and by their members, and because credit union shares are essentially members' deposits. The tax status has been re-affirmed periodically by the U.S. Congress and is supported by many lawmakers.

As recently as yesterday, on a call to state credit union league presidents, Credit Union National Association President/CEO Bill Cheney reiterated that preserving the tax status of credit unions is CUNA's top priority and will be the number one issue during CUNA's upcoming Governmental Affairs Conference (GAC)  here from Feb. 24-28.

Capitol Hill visits on key credit union issues are at the core of CUNA's GAC, which draws thousands of credit union representatives from across the country to Washington, D.C. each year.

"The congressional agenda for the year is unclear at this point but some expect it will include comprehensive tax reform discussions. As part of that process, the credit union tax status is likely to be examined and could come under significant threat--particularly since we know the banks will continue their paid media and lobbying barrage urging credit union taxation.

"Protecting the credit union tax exemption tops CUNA's  list of ten 2013 priorities for good reason," Cheney said.

President re-nominates Cordray to head CFPB

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WASHINGTON (1/25/13)--Consumer Financial Protection Bureau (CFPB) Director Richard Cordray was nominated by President Barack Obama Thursday to be confirmed as leader of that agency. Cordray called Credit Union National Association President/CEO Bill Cheney before Obama's announcement to notify CUNA that the nomination was coming.

"Director Cordray has been accessible and open to listening to the views of CUNA and credit unions on CFPB's agenda and proposed regulations," Cheney said after the nomination announcement. "CUNA continues to demonstrate to the agency that credit unions are already highly regulated and we encourage the bureau to focus their resources on less regulated financial players."

Announcing the nomination on Thursday, Obama said Cordray "has earned a reputation as a straight shooter and somebody who is willing to bring every voice to the table in order to do what's right for consumers and our economy." He urged the Senate to confirm Cordray.

Obama claimed use of his executive powers to install Cordray as CFPB director during a late 2011/early 2012 congressional recess when the confirmation process stalled in Congress. Several senators at that time said they would not vote to confirm any CFPB nominee unless changes to the CFPB were enacted. Suggested changes included increasing CFPB leadership to a five-member commission and reforming some operational rules.

Cordray's recess appointment expires at the end of this year.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) on Thursday said he hopes the decision to re-nominate Cordray will open the debate about placing certain checks and balances on the agency.

Also Thursday, the president nominated Mary Jo White to be the next chairman of the U. S. Securities and Exchange Commission. White is a former U.S. Attorney for the Southern District of New York.

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NCUA announces annual reg review focus

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ALEXANDRIA, Va. (1/24/13)--The National Credit Union Administration has released its annual list of rules and regulations that will come under review this year.  Among them: member business loans, fair credit reporting, management official interlocks, and Central Liquidity Facility rules.

Included on the full 2013 review list:
  • 711 Management Official Interlocks;
  • 712 Credit Union Service Organizations;
  • 713 Fidelity Bond and Insurance Coverage for Federal Credit Unions;
  • 714 Leasing;
  • 715 Supervisory Committee Audits and Verifications;
  • 716 Privacy of Consumer Financial Information;
  • 717 Fair Credit Reporting;
  • 721 Incidental Powers;
  • 722 Appraisals;
  • 723 Member Business Loans;
  • 724 Trustees and Custodians of Certain Tax-Advantaged Savings Plans;
  • 725 National Credit Union Administration Central Liquidity Facility;
  • 740 Accuracy of Advertising and Notice of Insured Status;
  • 741 Requirements for Insurance;
  • 745 Share Insurance and Appendix; and 
  • 747 Administrative Actions, Adjudicative Hearings, Rules of Practice
  • and Procedure, and Investigations.
The NCUA reviews all of its rules every three years, scheduling a look at about one-third of its rules each year on a  rotating basis. The agency says its goal is to ensure that all regulations are clearly articulated and easily understood, a goal that the Credit Union National Associatoin endorses.

Comments on the clarity and content of the regulations are encouraged, the agency added. The NCUA will accept comments on these items until Aug.5. CUNA Regulatory Advocacy will be working with CUNA subcommittees, leagues, and the CUNA Councils to review the rules and file comments with the agency.  

Comments may be e-mailed to OGCMAIL@NCUA.GOV or mailed to Regulatory Review 2013, Office of General Counsel, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Please include the words "Regulatory Review 2013" in the subject line.

A closer look: CUNA 2013 communications goal, lead folks to CUs as primary FI partner

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WASHINGTON (1/24/13)--The Credit Union National Association's communications strategy for 2013 will be all about encouraging more Americans to choose credit unions as their best financial partner.

CUNA communications will support this strategy by providing key credit union information and CUNA insight to credit unions, their members and the general public.

The consumer-oriented website aSmarterChoice.org was developed to share the value of credit union membership and to help potential credit union members find a new credit union to join. That site saw record interest in 2012, receiving nearly 385,000 visits in that year alone.

While those numbers are solid, CUNA is working to sustain--and improve--those numbers in 2013, CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile said.

The site will be improved with new search optimization and other tools to help users better learn about their credit union options, and find other key information. CUNA will also produce social media tags and banner ads to help state credit union leagues spread the word about aSmarterChoice.org, and, in turn, inform the public about credit unions.

"These site improvements will help CUNA and credit unions prepare themselves for the next time a huge event like Bank Transfer Day happens," Gentile said.

Mark Wolff, CUNA senior vice president of communications, added that CUNA will also continue its aggressive outreach to the national media. "Our goal is to generate as much coverage as we can of the value credit unions provide consumers," Wolff said.

Credit union-centric events both large and small will receive up-to-the-minute coverage in News Now, biweekly roundups and in-depth coverage in the members-only publication Credit Union NewsWatch e-newsletter. CUNA communications will also reach out to credit unions through direct email communications, video messages, working the credit union trade press, providing an informative Annual Report, and more.

Credit union CEOs in 2013 will also have a new way to keep informed: Weekly editions of The Cheney Report, which was first released in early January. The Cheney Report delivers CUNA President/CEO Bill Cheney's latest thoughts on three to four key events and policy developments each Friday, giving readers a CEO-to-CEO perspective on each week's major developments. "The report will also provide a valuable window into CUNA's actions on behalf of member credit unions, and reinforce the value of CUNA membership," Gentile said.

News Now is featuring an in-depth look at each area of CUNA's 2013 priorities. This article is the fourth in that series. The first unveiled CUNA's legislative priorities.

Use the resource links below to read more about CUNA's 2013 action agenda, legislative priorities, regulatory advocacy strategy, and state governmental affairs agenda.

OSCUI targets $95M for 2013-2014 CDRLF

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ALEXANDRIA, Va. (1/24/13)--The National Credit Union Administration expects to make up to $9.5 million in funds available in the 2013-2014 round of the Community Development Revolving Loan Fund (CDRLF) Loan Program, the agency said on Wednesday.

The NCUA's Office of Small Credit Union Initiatives (OSCUI) administers the CDRLF. Congress has not made an appropriation to the OSCUI Loan Program for Fiscal Years 2013-2014, the NCUA noted. Money for the program could be derived from appropriated and earned funds, the agency said.

The agency offered $11 million in low-rate loans through the 2012 round of the program. The program provides loans to credit unions serving predominantly low-income members. It also serves as a source of funding to help low-income designated credit unions (LICUs) respond to emergencies arising in their communities.

The NCUA began accepting loan applications for this round on Jan. 1, and applications will be accepted until Dec. 31, 2013. However, the agency said loan program funds may be exhausted before this deadline is reached.

The NCUA expects that most of the loans provided under this NOFO will be for $300,000 or less, as "loans of this size will help maximize allocation of this limited resource among many credit unions." The agency said it will also consider loan requests for more than $300,000 "from applicants that demonstrate the need and capability to effectively deploy such funding; and have a high probability of realizing significant impact, while maintaining financial and operational soundness."

These applications will be assessed on a case-by-case basis, the NCUA said.

For more on the loan program, use the resource link.

Matz on CUbroadcast: CU progress, 2013 priorities

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ALEXANDRIA, Va. (1/24/13)--2012 was a positive year for the credit union system; it started slow and improved over the 12 months, National Credit Union Administration Chairman Debbie Matz declared in a new CUbroadcast.com interview.

"When you look back at where (credit unions) were at the beginning of the year and where they wound up at the end of the year, it really shows a lot of improvement and a lot of hard work on their part and ours," Matz said.

Matz also shared an outlook for 2013.

The NCUA chairman said the agency plans to revisit proposed changes to the rural district definition at its next board meeting and will also finalize a rule on Treasury Inflation Protected Securities--or TIPS--in the near future. Matz also said the NCUA hopes to keep Temporary Corporate Credit Union Stabilization Fund assessments in the single digits and to not charge a National Credit Union Share Insurance Fund in 2013.

The NCUA's ongoing lawsuits against Wall Street firms and agency regulatory modernization efforts are also addressed in the video.

For more, use the resource link.

NCUA webinar offers LICU operating tips

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ALEXANDRIA, Va. (1/24/13)--Low-income credit unions (LICUs) got some tips on how they can improve their own operations and increase member service during a Wednesday National Credit Union Administration webinar.

The NCUA in 2012 informed 1,003 federal credit unions of their eligibility to become low-income credit unions (LICUs), and 676 have accepted. As a group, the newly designated LICUs serve more than 7.7 million members and manage more than $66 billion in combined assets. (NCUA Photo)
NCUA Office of Small Credit Union Initiatives Economic Development Specialist Vanessa Lowe noted that an estimated 20% of Americans are considered unbanked or underbanked, and may be using alternative financial service providers such as check cashing firms.

She encouraged LICUs to find ways to reach these potential credit union members. Credit unions can do a better job than alternative financial services providers that sometimes use predatory tactics against these unbanked individuals, she said. Lowe said LICUs could examine their membership composition and the types of products they offer to identify opportunities to strengthen their own services and attract and better serve potential members.

Lowe also noted the resources LICUs can access through REAL Solutions and other National Credit Union Foundation programs.

The webinar also addressed the general benefits of the LICU designation, which include the ability to accept supplemental capital and an exemption from the member business lending (MBL) cap under certain circumstances. LICU-designated credit unions are also eligible for Community Development Revolving Loan Fund grants and low-interest loans and may accept deposits from non-members.

NCUA staff said they are working on ways to help state chartered credit unions qualify for LICU designations.

NCUA Office of Consumer Protection Consumer Access Analyst Elliot Weiss noted that LICUs may use supplemental capital to shore up their net worth, and said a section of the NCUA's incidental powers regulation may allow credit unions to offer check cashing and other services to non-members. Credit unions do not have to offer services to nonmembers, but the resources are out there if they choose to do so, he said.

However, Weiss told credit unions to be careful about which products they offer and whom they offer those products to. LICU benefits offer advantages, but can also lead to unforeseen losses if they are not properly managed, he said. These benefits can help a credit union's business strategy, but should not be a credit union's only business strategy, Weiss noted.

The webinar will be posted on the NCUA's website in the coming weeks, and questions that were not addressed during the webinar will also be posted.

Republican House Financial Services subcommittee assignments are set

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WASHINGTON (1/23/13)--House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas) on Tuesday announced Republican subcommittee assignments for his panel for the 113th U.S. Congress.

The Financial Institutions and Consumer Credit Subcommittee, a key group for credit unions, will be chaired by Rep. Shelley Moore Capito (W. Va.). Jim Renacci (Ohio) will serve as vice chair.

The remaining members are:
  • Spencer Bachus (Ala.),
  • Gary Miller (Calif.),
  • Patrick McHenry (N.C.),
  • Kevin McCarthy (Calif.),
  • Blaine Luetkemeyer (Mo.),
  • Stevan Pearce (N.M.),
  • Lynn Westmoreland (Ga.),
  • Sean Duffy (Wis.),
  • Michael Fitzpatrick (Penn.),
  • Tom Cotton (Ark.),
  • Robert Pittenger (N.C.),
  • Marlin Stutzman (Ind.),
  • Andy Barr (Ky.),
  • John Campbell (Calif.) and,
  • Bill Posey (Fla.).
Hensarling will serve as an ex officio member of all House Financial Services subcommittees but two; the subcommittees on financial institions, and on capital markets and government-sponsored enterprises for which he is a full member. Chairman Emeritus Spencer Bachus (Ala.) will serve as ex officio members of all subcommittees.

Republican members were also announced for the following House Financial Services subcommittees: Capital Markets and Government Sponsored Enterprises, Insurance & Housing, Domestic and  International Monetary Policy, and Oversight & Investigations subcommittees were also announced.

Credit Union National Association President/CEO Bill Cheney has scheduled a series of meetings with many of the new financial services committee members this week.

For the full subcommittee lineups, use the resource link.

Commodore Perry FCU gets 60-day extension for exam appeal

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ALEXANDRIA, Va. (1/23/13)--The National Credit Union Administration has granted Commodore Perry FCU a 60-day extension of a supervisory exam appeal filed by the credit union.

The Port Clinton, Ohio, credit union, last year challenged an NCUA exam that resulted in the lowest CAMEL rating that the credit union has ever received.

Commodore Perry FCU President Thomas Renz, speaking to News Now, charged that the low CAMEL rating was retribution for his credit union's reporting of an NCUA examiner's "extremely unprofessional" conduct. The credit union had asked for a new examiner, but the examiner that was the subject of the credit union complaint was allowed to complete his examination. According to Renz, the final NCUA examination contained a number of factually incorrect findings.

NCUA Region III Director Herb Yolles at first rebuffed Commodore Perry's attempt to appeal, but the agency has now granted more time for the appeal to be considered. The appeal process must now be completed by March 18.

Renz said he appreciates NCUA Chairman Debbie Matz's willingness to work to resolve differences, and Yolles's willingness to maintain an open line of communications with the credit union, and his earnest desire to see this process resolved amicably.

"It is our sincere hope that this issue be resolved and that part of that resolution includes an open dialogue about what we have learned from this process," Renz added.

New senator, CFPB architect Warren joins GAC lineup

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WASHINGTON (1/23/13)--New senator, credit union member and Consumer Financial Protection Bureau architect Elizabeth Warren (D-Mass.) is the latest legislator to join a high-powered Credit Union National Association 2013 Governmental Affairs Conference (GAC) lineup.

Warren, who has been selected to serve on the Senate Banking Committee, was endorsed during her 2012 Senate campaign by the Massachusetts Credit Union League. She thanked credit unions for their support in her post-election victory speech made last month. Warren also cited credit unions as an example of giving real value to consumers and to communities in a speech at CUNA's 2011 GAC.

She will speak during the morning general session on Feb. 27.

Speaker of the House Rep. John Boehner (R-Ohio), credit union champions Sen. Mark Udall (D-Colo.), Rep. Ed Royce (R-Calif.) and Rep. Brad Sherman (D-Calif.) are also slated to speak at the 2013 GAC. House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Majority Whip Kevin McCarthy (R-Calif.), House Financial Services Committee senior member Spencer Bachus (R-Ala.), Rep. Peter King (R-N.Y.) and Rep. Blaine Luetkemeyer (R-Mo.) are also on the GAC speaking scheduled.

More congressional and regulatory speakers will be added to the 2013 GAC lineup in coming weeks.

CUNA's 2013 GAC will take place Feb. 24-28 at the Washington Convention Center in Washington, D.C. This year's GAC theme, "Powerful Cause, Positive Effect," reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day.

For more information, follow the @CUNAverse twitter hashtag #CUNAGAC. Use the resource link to register for the GAC.

CFPB delays remittance rule Feb 7 effective date

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WASHINGTON (1/23/13)--The Consumer Financial Protection Bureau announced Tuesday that it is delaying the effective date of its international remittance transfer rule that was set to go into effect Feb. 7.

A new effective date will be announced later this year, the bureau said in a blog post.

The Credit Union National Association has urged the CFPB, including in its comment letter filed Jan. 15, to postpone the effective date of the remittance rule and to give credit unions as much time as possible to comply.

The bureau is also accepting comments on a separate proposal that provide more flexibility to international remittance transfer providers regarding the disclosure of foreign taxes and fees imposed by the recipient's institution for receiving a remittance transfer. The proposal would also revise the error resolution provisions that apply when a remittance transfer is not properly delivered  because the sender provided incorrect information.

Under the final rule published last February, remittance transfer providers will be 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.

The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year.

Regulators look at what responsibilities social media use brings for FIs

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WASHINGTON (1/23/13)--The National Credit Union Administration and bank regulators have asked for comment as they prepare guidelines for social media use by financial institutions.

The regulators on Tuesday released proposed guidance addressing how consumer protection and compliance laws, regulations, and policies could be applied to the use of online social media platforms by credit unions, financial institutions and certain nonbank entities. Credit unions and other parties can now comment on the pending social media guidance.

The coming joint agency guidance "is intended to help financial institutions understand potential consumer compliance, legal, reputation, and operational risks associated with the use of social media, along with expectations for managing those risks," said the Federal Financial Institutions Examination Council (FFIEC).

Poor due diligence, oversight, or control of social media platforms can create increased risks for financial institutions and their members or customers, the FFIEC noted.

The guidance will not create new obligations for financial institutions, the FFIEC said, but financial institutions will be expected to manage risk "as they would with any new process or product channel."

Credit unions and others may comment on any aspect of the guidance, but the FFIEC is specifically seeking information on:

  • Any types of social media use that should be added to the guidance;
  • Any other consumer protection laws, regulations, policies or concerns that may be implicated by financial institutions' use of social media that are not discussed in the proposed guidance but should be discussed; and
  • Any factors that may impede compliance with laws, regulations, and policies that address social media use.
Comments will be accepted for 60 days after the notice is published in the Federal Register. 

The FFIEC is comprised of the leaders of the NCUA, the Federal Reserve Board, the office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau. NCUA Chairman Debbie Matz has served as head of the FFIEC since 2011. Her two-year term is scheduled to end in March.

After inauguration, House, Senate are back in session

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WASHINGTON (1/23/12)--With Monday's inauguration activities now in the rearview mirror, members of the U.S. Congress will return to work this week.

The Senate this week is considering rule changes for the 113th Congress. Filibuster reform will be on the agenda and a Superstorm Sandy relief measure could also be considered. Committee elections will be held before Senate committees can officially organize.

The House is scheduled to consider legislation that would extend the debt limit for three months, and will also consider bills under suspension of the rules. The House Financial Services Committee will also hold its organizational meeting on Wednesday.

While House members are set to return to their districts on Thursday and Friday and stay there next week, the Senate is scheduled to remain in session at that time.

CUNA asks for CFPB clarification on small-servicer exemption

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WASHINGTON (1/22/13)--Credit unions are asking the Credit Union National Association whether a "small servicer," as defined in a new Consumer Financial Protection Bureau rule on mortgage servicing, still qualifies for an exemption from many of the rule's provisions if it uses a sub-servicer that is too big for the exemption. CUNA is asking the CFPB to clarify.

The CFPB's final mortgage servicing rule, issued Thursday, requires mortgage servicers to meet new periodic statement requirements, provide additional notice of rate changes to borrowers and help ensure that consumers know their options to prevent foreclosures.

The servicing rule contains a number of exemptions for credit unions and other financial institutions that meet the bureau's "small issuer" definition--that they service 5,000 or fewer loans that they or an affiliate originated. Servicers that own mortgage servicing rights for mortgage loans that are not owned by the servicer of affiliate, or for which the servicer or affiliate is ot the entity to whom the obligation was initially payable, are not small servicers.

CUNA talked with the CFPB on this Friday and sought clarification. CUNA will update credit unions and leagues early next week on issues, such as:

  • How is a credit union, which qualifies as a small servicer, affected it it retains a sub-servicer that does not meet the small-servicer definition?
Under the CFPB rule, "small servicers" will be exempted from the periodic statement requirements, general servicing policies, procedures and requirements, early intervention and continuity of contact provisions with delinquent borrowers and a vast majority of the loss mitigation procedures. They will not, however, be exempted from the information request and error resolution requirements.

Compliance: Don't relax, escrow disclosures are still coming

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WASHINGTON (1/22/13)--For those of you who have been dancing around your offices since the final escrow rule was issued by the Consumer Financial Protection Bureau because the proposed escrow disclosures were missing--your dance party will probably be short-lived, the compliance team at the Credit Union National Association warns.

As the CFPB notes several times in the "Supplementary Information" to the rule, the disclosure provisions will not be adopted "in this rule."  [Emphasis added]. 

As you may remember, last November, the CFPB published a rule that "delayed implementation of certain new mortgage disclosures".  The purpose of the delay is to give the industry extra time so that the "entire TILA-RESPA disclosure regime" can go into effect at once. The "TILA-RESPA disclosure regime" includes the proposed escrow disclosures.

So, although the final escrow rule issued last week, which takes effect June 1, only includes the amended definitions of "higher-priced mortgage loan" and "escrow accounts", expect to see the escrow disclosures show up in a final rule later this year.

WOCCU-CUNA supported changes in new FATCA rules

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WASHINGTON (1/22/13)--When the U.S. Internal Revenue Service (IRS) released its final regulations last week to implement the Foreign Account Tax Compliance Act (FATCA), the final included key recommendations made by the World Credit Union Council and supported by the Credit Union National Association to reduce the burden on credit unions.

"The FATCA regulation will have a far-reaching impact on credit unions in many jurisdictions," said Brian Branch, World Council president and CEO. "In today's world, we continue to advocate for reducing regulatory burden so that credit unions can concentrate on serving their members' needs."

FATCA is designed to create a tax information reporting and withholding system for certain payments that are made to foreign financial institutions (FFIs) and other entities.

The rules target U.S. taxpayers using foreign accounts to avoid paying U.S. income taxes and they apply to non-U.S. credit unions in many jurisdictions. The FATCA final rule's "U.S. withholding agents" provisions will also apply to U.S. credit unions that make international payments.

FATCA will require most large or internationally active non-U.S. financial institutions to register with the IRS and monitor their accounts to detect U.S. taxpayers who may be hiding money overseas. The IRS's proposed regulation, however, would likely have also required smaller non-U.S. credit unions to register with the IRS because it only exempted small "banks" as defined by U.S. tax law.

WOCCU explained in a comment letter and in testimony to the IRS last year that the requirement would have placed unnecessary and inappropriate burdens on small foreign credit unions.

In the final FATCA regulation, the IRS incorporated World Council's key recommendations:

  • That credit unions and similar credit cooperatives fall within the definition of FATCA-exempt "non-registering local banks," and;
  • Non-U.S. credit unions are allowed to list U.S. dollar accounts on their websites without losing FATCA-exempt status.
Most non-U.S. credit unions with less than $175 million in assets will fall within the "non-registering local bank" exemption, and most larger non-U.S. credit unions will qualify as partially exempt "deemed compliant" foreign financial institutions.

Use the resource link to read more about the FATCA rule details.

Loan 'steering' banned by new CFPB reg

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WASHINGTON (1/22/13)--The Consumer Financial Protection Bureau issued rules to prevent unscrupulous mortgage loan originators (MLO) from generating higher compensation for themselves by steering borrowers into risky and high-cost loans.

The CFPB's final rules:
  • Broaden the application of prohibitions on compensation that varies with the loan terms. For instance, an MLO should not be paid more if the consumer takes a loan with a higher interest rate, a prepayment penalty, or higher fees;
  • Prohibit "dual compensation": Under the CFPB's rules, the loan originator cannot get paid by both the consumer and another person such as the creditor; and
  • Set qualification and screening standards: An MLO must meet character, fitness, and financial responsibility reviews, pass a criminal background check, be screened for felony convictions; and undertake training to ensure they have the knowledge about the rules governing the types of loans they originate.
The final rule also implements Dodd-Frank provisions that, for mortgage and home equity loans, generally prohibit mandatory arbitration of disputes related to mortgage loans and the practice of increasing loan amounts to cover single premium insurance premiums.

One area in the proposal that concerned the Credit Union National Association was the use of proxy factors to determine whether the rules apply to compensation plans. The final rules clarify that the proxy factors are ones that consistently vary over a significant number of transactions and that the loan originator has the ability to add, drop or change the factor.

The new rule, required under the Dodd-Frank Act, is available on the CFPB website (use the resource link) and was issued Sunday, Jan. 20. CUNA's Regulatory Advocacy team will be reviewing the final rule and providing an analysis.

Free appraisal reports for all borrowers under new CFPB rule

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WASHINGTON (1/22/13)--The Consumer Financial Protection Bureau adopted a new rule Friday that requires mortgage lenders to provide applicants with free copies of all appraisals and other home-value estimates.

"As a general practice, most credit unions already do this," said Luke Martone, assistant general counsel for the Credit Union National Association. "The rule, in essence, requires other creditors to adopt the same high standards generally used by credit unions."

The rule was required under the Dodd-Frank Wall Street Reform and Consumer Protection Act. It is intended to ensure that consumers can receive information prior to a loan closing about how the property's value was determined.

"Having this information available promptly makes it easier for loan applicants to make informed decisions," said CFPB Director Richard Cordray when announcing the rule's release.

The final rule also requires creditors to:
  • Inform consumers within three days of receiving an application for a loan of their right to receive copy of all appraisals; and
  • Provide the copies of appraisal reports and other written home-value estimates to consumers promptly, or three days before closing, whichever is earlier. 
The requirements go into effect in January 2014 and will apply to first-lien mortgages.

The new rule, issued under Regulation B, eliminates an exemption for federal credit unions that was included in the Federal Reserve's 1993 rule because the National Credit Union Administration had a similar rule requiring free reports be provided only when requested.

Also on Friday, the CFPB with several other federal regulatory agencies, adopted a new rule that establishes special requirements concerning appraisals for higher-priced mortgage loans. The NCUA adopted that rule last week.  Use the resource link to read more.

NEW: CFPB delays remittance rule effective date

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WASHINGTON (1/22/13, UPDATED 4:00 p.m. ET)--The Consumer Financial Protection Bureau is delaying the effective date of its remittance rule that was set to go into effect Feb. 7.

A new effective date will be announced later this year, the bureau announced in a blog post.

The Credit Union National Association urged the CFPB in a recent comment letter to postpone the effective date of the remittance rule and to give credit unions as much time as possible to comply.

Under the CFPB's rule, remittance transfer providers would be required to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate,  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.

The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year.

Look to tomorrow's News Now for more detail.

King, Sherman, Leutkemeyer sign on as GAC keynoters

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WASHINGTON (1/22/13)--A trio of key Capitol Hill lawmakers--Reps. Peter King (R-N.Y.), Brad Sherman (D-Calif.) and Blaine Luetkemeyer (R-Mo.)--have added their names to a growing list of political luminaries that are set to speak at the Credit Union National Association's 2013 Governmental Affairs Conference (GAC).

King and Sherman were chief sponsors of CUNA-backed 2012 credit union supplemental capital legislation (H.R. 3993). They are both scheduled to speak on Feb. 27. King last year noted that their bill would provide the National Credit Union Administration with "the same authority and flexibility to adjust capital requirements in response to changes in economic conditions as Congress has provided to federal banking regulators."

Sherman is a frequent GAC guest. This will be the first time that King has spoken before the GAC.



Another first-time GAC attendee, Luetkemeyer, is also scheduled to speak on Feb. 27. Luetkemeyer, along with Rep. David Scott (D-Ga.), last year introduced a bill that eliminated a duplicative provision that required a physical notice also be posted on the ATM machine. The bill, propelled by strong support from CUNA and the credit union system, was approved by the U.S. Congress and signed into law late last year, ending a regulatory burden that created legal and financial issues for some credit unions and other financial institutions.

Reps. King, Sherman and Luetkemeyer all serve on the House Financial Services Committee. 



Speaker of the House Rep. John Boehner (R-Ohio), credit union champions Sen. Mark Udall (D-Colo.) and Ed Royce (R-Calif.), newly named House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Majority Whip Kevin McCarthy (R-Calif.) and House Financial Services Committee senior members Spencer Bachus (R-Ala.) are also scheduled to speak during the GAC.

More congressional and regulatory speakers will be added to the 2013 GAC lineup in coming weeks.

CUNA's 2013 GAC will take place Feb. 24-28 at the Washington Convention Center in Washington, D.C. This year's GAC theme, "Powerful Cause, Positive Effect," reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day.

For more information, follow the @CUNAverse twitter hashtag #CUNAGAC. Use the resource link to register for the GAC.

NEW: CUNA asks for CFPB clarification on small-issuer exemption

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WASHINGTON (1/18/13, UPDATED 6:15 p.m. ET)--Credit unions are asking the Credit Union National Association whether a "small servicer," as defined in a new Consumer Financial Protection Bureau rule on mortgage servicing, still qualifies for an exemption from many of the rule's provisions if  it uses a sub-servicer that is too big for the exemption. CUNA is asking the CFPB to clarify.

The CFPB's final mortgage servicing rule, issued Thursday, requires mortgage servicers to meet new periodic statement requirements, provide additional notice of rate changes to borrowers and help ensure that consumers know their options to prevent foreclosures.

The servicing rule contains a number of exemptions for credit unions and other financial institutions that meet the bureau's "small issuer" definition--that they service 5,000 or fewer loans that they or an affiliate own or originated. Servicers that own mortgage servicing rights for mortgage loans that are not owned by the servicer of affiliate, or for which the servicer or affiliate is not the entity to whom the obligation was initially payable, are not small servicers.

CUNA talked with the CFPB on this today and sought clarification. CUNA will update credit unions and leagues early next week on issues, such as:

  • How is a credit union, which qualifies as a small servicer, affected it it retains a sub-servicer that does not meet the small-servicer definition?
Under the CFPB rule, "small servicers" will be exempted from the periodic statement requirements, general servicing policies, procedures and requirements, early intervention and continuity of contact provisions with delinquent borrowers and a vast majority of the loss mitigation procedures. They will not, however, be exempted from the information request and error resolution requirements.

CUNA witness stresses CUs' difference at CFPB mortgage hearing

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ATLANTA, Ga. (1/18/13)--Credit unions did not create the mortgage market issues that the Consumer Financial Protection Bureau seeks to address through its new regulations, and therefore should be shielded from regulatory burden where possible, Credit Union National Association witness Pam Davis said at a Thursday hearing.

Click to view larger image Pam Davis of Delta Community CU, Atlanta, Ga., said new CFPB mortgage servicing regulations will benefit borrowers. She encouraged the agency to recognize the differences between credit unions and for-profit institutions as it develops regulations. (CUNA Photo)


Davis also represented the Georgia Credit Union Affiliates.

The hearing was held just after the CFPB released a final rule addressing mortgage servicing on Thursday morning. Regulatory measures addressing mortgage loan origination (MLO) and high-risk mortgage appraisals are also on the agency's docket: There is a Jan. 21 deadline for their release. The CFPB last week unveiled final rules regarding ability-to-repay requirements, escrow accounts, and "high-cost" mortgages.

Davis, who serves as vice president of real estate services at Delta Community CU, Atlanta, said CUNA and credit unions are "concerned about the regulatory burden imposed on lenders and will be reviewing the new rules from that perspective."

The CFPB's final mortgage servicing rule requires mortgage servicers to simplify billing statements, provide additional notice of rate changes to borrowers and help ensure that consumers know all of their options to prevent foreclosures.

The servicing rule contains a number of exemptions for credit unions and other small financial institutions that service 5,000 or fewer loans that they or an affiliate originated.

Those credit unions will be exempted from periodic statement requirements, general servicing policies, procedures and requirements, early intervention and continuity of contact provisions with delinquent borrowers and a vast majority of the loss mitigation procedures, CUNA Deputy General Counsel Mary Dunn noted.

They will not, however, be exempted from the information request and error resolution requirements, Dunn said.

Davis during the hearing said the CFPB's mortgage servicing regulations "do address a number of problem areas" and will be helpful for borrowers. The servicing rules will also address some of the problems associated with misaligned incentives in the servicing market. However, Davis noted, CUNA and credit unions "want to ensure that responsible lenders are not unduly burdened in the process."

Regarding the pending MLO final rules, Davis said, "There is absolutely no evidence that credit unions have engaged in abusive practices regarding mortgage loan originator compensation and additional requirements will needlessly add to the regulatory burden credit unions already face."

CUNA has advised the CFPB to eliminate the use of "proxy factors" to restrict compensation to loan originators, revise proposed restrictions on upfront points and fees, and provide credit unions with some flexibility on the use of arbitration clauses, Davis said.

NEW: Loan 'steering' banned by new CFPB reg

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WASHINGTON (1/18/13, UPDATED 3:45 P.M. ET)--The Consumer Financial Protection Bureau  announced it is issuing rules to prevent unscrupulous mortgage loan originators (MLO) from generating higher compensation for themselves by steering borrowers into risky and high-cost loans.

The CFPB's final rules will:
  • Broaden the application of prohibitions on compensation that varies with the loan terms.  For instance, an MLO should not be paid more if the consumer takes a loan with a higher interest rate, a prepayment penalty, or higher fees;
  • Prohibit "dual compensation": Under the CFPB's rules, the loan originator cannot get paid by both the consumer and another person such as the creditor; and
  • Set qualification and screening standards:  An MLO must meet character, fitness, and financial responsibility reviews, pass a criminal background check, be screened for felony convictions; and undertake training to ensure they have the knowledge about the rules governing the types of loans they originate.
The final rule also implements Dodd-Frank provisions that, for mortgage and home equity loans, generally prohibit mandatory arbitration of disputes related to mortgage loans and the practice of increasing loan amounts to cover credit insurance premiums.

One area in the proposal that concerned the Credit Union National Association was the use of proxy factors to determine whether the rules apply to compensation plans.  While the final rules have not been issued yet, based on the  agency's summary the use of such factors remains in the final rule.

The new rule, required under the Dodd-Frank Act, will be posted to the CFPB website (use the resource link) Sunday, Jan. 20. CUNA's Regulatory Advocacy team will be reviewing the final rule and providing an analysis. See Tuesday's News Now for more details.

Fed's payments survey can help CUs meet members' needs

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WASHINGTON (1/18/13)--Every three years the Federal Reserve launches a study to determine the current volume and composition of electronic and check payments in the U.S. and the agency announced Thursday it's that time again.

"This is a study credit unions should be on the lookout for. They can gain insight from the study results on payment trends and methods, as well as additional fraud information. This will help with understanding their members' payment needs," said Mary Dunn, Credit Union National Association senior vice president of regulatory affairs.

"CUNA encourages any credit union to participate if they receive the Fed's survey," Dunn added.

The 2013 Federal Reserve Payments Study will take a three-pronged approach to information collection. Collectively the data is intended to allow the Fed to estimate the annual number, dollar value, and composition of retail noncash payments.

Previous studies have revealed significant changes in the U.S. payments system over time, including a continuing decline in the use of checks and growing use of electronic payments, such as automated clearinghouse, electronic banking transactions, credit cards, debit cards and stored value cards.

The survey will be conducted through the Federal Reserve's Retail Payments Office, located at the Federal Reserve Bank in Atlanta.

CUNA and its Payments Policy Subcommittee will be reviewing the results of the study when they become available, especially trends in electronic payments and the evolving payments landscape.

To read the Fed study announcement, use the resource link below.

NCUA reminds CUs of March 1 HMDA filing deadline

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ALEXANDRIA, Va. (1/18/13)--Credit unions that were subject to Home Mortgage Disclosure Act requirements in 2012 have until March 1 to submit their 2012 Home Mortgage Disclosure Act (HMDA) loan/application register (LAR) data to the Federal Reserve Board, the National Credit Union Administration reminded Thursday in a regulatory action alert (13-RA-02).

Credit unions that do not file their LAR forms by March 1 could become subject to civil money penalty assessments, the NCUA noted.

Online and email filing options are available.

Credit unions with 25 or fewer entries on their LAR may report and submit their data in paper form, the NCUA said. Credit unions with more than 25 LAR entries are required to submit those reports in an automated, machine-readable format.

The NCUA advised credit unions to review its March regulatory alert, "Home Mortgage Disclosure Act Data Collection Requirements for Calendar Year 2012" (12-RA-02), to determine whether they are required to submit HMDA data. Credit unions with total assets of more than $41 million as of Dec. 31, 2011 were subject to HMDA filing requirements for 2012.

For the full letter, use the resource link.

The NCUA in a Jan. 24 webinar will reveal HMDA LAR preparation tips and discuss ways to avoid common errors found on those forms. The webinar, entitled "HMDA: Accuracy and Timeliness," is scheduled to begin at 2 p.m. ET. (See Jan. 3 News Now story: NCUA to offer Jan. 24 HMDA webinar)

Earlier this month, the Consumer Financial Protection Bureau announced that credit unions and other financial institutions with total assets above $42 million as of Dec. 31, 2012 are required to collect and report HMDA data this year.

Small CU consulting program receives record interest

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ALEXANDRIA, Va. (1/17/13)--A record 319 credit unions have applied for planning assistance and other help through the National Credit Union Administration's Office of Small Credit Union Initiatives (OSCUI) Consulting Program, the agency has reported.

This heightened interest has led to a record number of consulting program participants in the first round of 2013: 240 credit unions will take part. Credit unions that have been accepted into the consulting program were notified in mid-January, OSCUI said. This round of the consulting program will run from January until June. A second 2013 round of the program will begin in July.

Through the consulting program, OSCUI offers budgeting, marketing, policy development and strategic planning assistance. The experienced economic development specialists that offer this assistance also help credit unions tackle other examination issues and issues related to internal controls and regulatory compliance. Assistance with net worth restoration plans or revised business plans, and consulting services to groups that wish to organize a credit union may also be provided, according to the NCUA.

Credit unions with less than $10 million in total assets, charters that have been approved within the past 10 years, or low-income designations may apply for the consulting program. The program is free of charge.

OSCUI Director William Myers said the program has much to offer eligible credit unions.

More than 200 credit unions took part in the most recent round.

House Speaker John Boehner to address CUNA's 2013 GAC

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WASHINGTON (1/17/13)--Speaker of the House Rep. John Boehner (R-Ohio) will address the Credit Union National Association's 2013 Governmental Affairs Conference (GAC) in Washington on Feb. 26.

"We are very honored to again have Speaker Boehner join us at the GAC," said CUNA President and CEO Bill Cheney.  "We know he has a full agenda in the House with debt ceiling, sequestration and government funding measures all coming to the fore near the time of our conference.



"The Speaker's acceptance of our invitation is indicative of his appreciation for all credit unions do to ably serve their members in Ohio and nationwide."

Speaker Boehner first addressed CUNA's GAC in 2011.  He is one of two sitting Speakers of the House to address the credit union movement's premier national conference.  Then-Speaker Newt Gingrich spoke at the GAC in February 1998 during CUNA, league and credit unions' successful fight to enact H.R. 1151, the Credit Union Membership Access Act.

Sen. Mark Udall (D-Colo.), champion of credit union member business lending legislation in the Senate, also has been added to the growing roster of Washington power players who will address the GAC this year.  Udall will speak Wednesday, Feb. 27.

CUNA's 2013 GAC takes place Feb. 24-28 at the Washington Convention Center in Washington, D.C.  Other confirmed speakers include newly named House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Majority Whip Kevin McCarthy (R-Calif.), and House Financial Services Committee senior members Spencer Bachus (R-Ala.) and Ed Royce (R-Calif.).

More congressional and regulatory speakers will be announced in coming weeks.

CUNA spotlights CU concerns at today's CFPB mortgage field hearing

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ATLANTA, Ga. (1/17/13)--Regulatory burden and how pending mortgage regulations could impact credit unions will be two items on the agenda when Pam Davis of Delta Community CU, Atlanta, Ga., voices credit union concerns at today's Consumer Financial Protection Bureau (CFPB) field hearing.

Davis, who serves as vice president of real estate services at Delta Community CU, will speak on a panel of three financial services industry speakers. She will speak on behalf of the Credit Union National Association and the Georgia Credit Union Affiliates. CUNA was invited by the CFPB to participate on one of the field hearing panel discussions.

The field hearing is scheduled to begin at 11 a.m. ET at the Rialto Center for the Arts at Georgia State University. League leaders and other credit union representatives will also attend the event.

The hearing will also feature remarks from CFPB Director Richard Cordray, consumer groups and members of the public. League and credit union officials are scheduled to meet directly with Cordray this week.

In her remarks, Davis will urge the agency to recognize the differences between credit unions and for-profit institutions as it develops regulations. She will also encourage the CFPB to exempt credit union activities as broadly as possible in light of those key distinctions, and credit union efforts to offer consumers a good deal.

The CFPB ahead of the hearing released a summary of its final mortgage servicing rule, which will be released in full today.

CUNA anticipates that final rules addressing mortgage loan originator compensation and high-risk-mortgage appraisals will also be released by the CFPB today. The National Credit Union Administration and Federal Deposit Insurance Corp. have already approved the high-risk-mortgage appraisal rule. (See Jan. 16 News Now story: NCUA approves high-risk mortgage appraisal rules)

These regulations are among a number of final rules that the CFPB must release by Jan. 21. Last week, the agency unveiled final rules regarding ability to repay requirements, escrow accounts, and "high-cost" mortgages. (See Jan. 11 News Now story: CFPB QM, ability-to-repay rules are out, CUNA provides summary)

Treasury's BSA advisory group seeking members

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VIENNA, Va. (1/17/13)--The Bank Secrecy Act Advisory Group (BSAAG), which ultimately makes BSA policy recommendations to the U.S. Treasury Secretary, is seeking nominations for new members.

The Credit Union National Association is a current member whose term continues through February 2015. CUNA fills the Credit Union Industry Trade Group position on the panel.

The advisory panel operates under the auspices of Treasury's Financial Crimes Enforcement Network (FinCEN) and is chaired by the FinCEN director.

FinCEN is inviting the public to nominate financial institutions and trade groups for membership on BSAAG for a three-year terms. Nominations for individuals will not be considered.

Use the resource link for application rules.

Inside Washington (01/17/2013)

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  • WASHINGTON (1/17/13)--A Federal Reserve proposal to heighten its oversight of foreign banks in the U.S. also would widen the central bank's regulation of foreign broker-dealers (American Banker Jan 16). The proposal would effectively take over responsibility for foreign broker-dealer supervision from the Securities and Exchange Commission. Bringing foreign bank broker-dealers under its umbrella is an indication the Fed is mistrustful of the SEC, said Margaret Tahyar, a partner with the law firm Davis Polk & Wardwell. Some industry observers have said that the SEC's net capital rule, which allows large firms to increase their leverage, was a driver of the financial crisis …
  • WASHINGTON (1/17/13)--The National Consumer Law Center released a 90-page report  Tuesday criticizing the Consumer Protection Bureau's national servicing standards--even before the agency publishes its final rules. The law center's report, "At a Crossroads: Lessons from the Home Affordable Modification Program," advises that regulators can learn from lessons gleaned  through the  government's Home Affordable Modification program  and should include those lessons into national servicing standards. HAMP was generally deemed unsuccessful because of massive service noncompliance, according to the report. "National loan modification standards should incorporate the successes of HAMP, which provided for increased access to sustainable modifications for many homeowners," the report said. "But national loan modification standards must not fall into the same trap that HAMP did"…
  • WASHINGTON (1/17/13)--Major banks--which typically seek to keep the government at arm's length--are urging U.S. officials to block Iranian cyberattacks against American financial institutions. Banks already have spent millions fighting the attacks (The Wall Street Journal Jan 16). They say it is not their responsibility to fend of attacks from another government. Among the banks affected are PNC Financial Services Group Inc., SunTrust Banks Inc. and BB&T Corp. Financial-services groups last year fought legislation to establish online security standards for key private-sector businesses. Banks claimed the new laws would undermine protections already in place …

CFPB mortgage servicers rule carries a 5,000-loan exemption

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WASHINGTON (1/17/13)--A final rule to require mortgage servicers to simplify billing statements, provide additional notice of rate changes to borrowers and help ensure that consumers know all of their options to prevent foreclosures have been released by the Consumer Financial Protection Bureau. The rule raises a key exemption threshold on monthly mortgage statements, a change that had been urged by the Credit Union National Association in its discussion with the CFPB.

The CFPB rule contains an exemption from some of its provisions for credit unions and other small financial institutions that service 5,000 or fewer loans, which they or an affiliate originate, up from a proposed 1,000-loan threshold.

"We actively advocated for the CFPB to increase the periodic statement requirement threshold from their proposed 1000 loans serviced to a higher number," noted CUNA President/CEO Bill Cheney.

"Our priority has been to ensure that as few credit unions as possible would be subject to these requirements. The 5,000 threshold is a marked improvement over the proposal, and while the devil is in the details, it appears small servicers such as credit unions will also be exempt from the loss mitigation application handling procedures, which is also a significant win for credit unions," he added.

Cheney said that CFPB Director Richard Cordray told him in a phone call prior to the rule's release that key changes would be incorporated in response to input the CFPB had received from credit unions and CUNA.

CUNA noted that more exemptions for credit unions may be contained in the final rule.

CUNA is reviewing the information the agency has released and additional positive provisions may be contained in the final rule.

The final rule, required by the Dodd-Frank Act, is set to go into effect in January 2014 and will require servicers to:

  • Provide borrowers with monthly statements detailing the amount and due date of the next mortgage payment, a breakdown of payments by principal, interest, fees, and escrow, and any recent transaction activity;
  • Inform borrowers of any available loss mitigation options; and,
  • Provide additional notice of rate changes to borrowers.
Servicers will be prevented from moving forward with foreclosure proceedings if a borrower has submitted an application for a loan modification or foreclosure prevention measure. Servicers will also need to consider all available foreclosure alternatives that are available to borrowers, and may not steer borrowers toward a specific alternative. The regulations will also make it more difficult for servicers to move for foreclosure judgment or conduct a foreclosure sale, the CFPB said.

New data storage and form processing standards are also contained in the regulations.

The agency and other regulators will release plain language implementation guides and other materials to help ensure the regulations are more easily implemented. Model and sample forms have also been released for servicers, and the CFPB said it will reach out to educate consumers on the new rules.

CUNA is developing regulatory summaries and charts to outline how the CFPB mortgage regulations will impact key credit union concerns and this information will be on CUNA's website as soon as possible in coming days.

NEW: House Speaker John Boehner to address CUNA's 2013 GAC

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WASHINGTON (1/16/13, UPDATED 11:35 a.m. ET)--Speaker of the House Rep. John Boehner (R-Ohio) will address the Credit Union National Association's 2013 Governmental Affairs Conference (GAC) in Washington on Feb. 26.

"We are very honored to again have Speaker Boehner join us at the GAC," said CUNA President and CEO Bill Cheney.  "We know he has a full agenda in the House with debt ceiling, sequestration and government funding measures all coming to the fore near the time of our conference.



"The Speaker's acceptance of our invitation is indicative of his appreciation for all credit unions do to ably serve their members in Ohio and nationwide."

Speaker Boehner first addressed CUNA's GAC in 2011.  He is one of two sitting Speakers of the House to address the credit union movement's premier national conference.  Then-Speaker Newt Gingrich spoke at the GAC in February 1998 during CUNA, league and credit unions' successful fight to enact H.R. 1151, the Credit Union Membership Access Act.

Sen. Mark Udall (D-Colo.), champion of credit union member business lending legislation in the Senate, also has been added to the growing roster of Washington power players who will address the GAC this year.  Udall will speak Wednesday, Feb. 27.

 
 
CUNA's 2013 GAC takes place Feb. 24-28 at the Washington Convention Center in Washington, D.C.  Other confirmed speakers include newly named House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Majority Whip Kevin McCarthy (R-Calif.), and House Financial Services Committee senior members Spencer Bachus (R-Ala.) and Ed Royce (R-Calif.).

More congressional and regulatory speakers will be announced in coming weeks.

Inside Washington (01/16/2013)

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  • WASHINGTON (1/16/13)--Starting in March, the  Federal Housing Finance Agency will have a new as deputy director of the Division of Housing Mission and Goals. Acting FHFA Director Edward DeMarco Tuesday  announced the appointment of Sandra Thompson to that post. She will oversee FHFA's housing and regulatory policy, financial analysis, and policy research and analysis of housing finance and financial markets. Thompson joins FHFA from the Federal Deposit Insurance Corporation (FDIC),  where she has served in various capacities over the past 23 years. During her time at the FDIC Thompson led the agency's examination and enforcement program for risk management and consumer protection at the height of the financial crisis. She also led the FDIC's outreach initiatives in response to a crisis of consumer confidence in the banking system
  • WASHINGTON (1/16/13)--Amy Friend has been named the chief counsel for the Office of the Comptroller of the Currency (OCC). Friend, a former assistant chief counsel at the OCC, served as chief counsel to the Senate Banking Committee, where she helped shape the Dodd-Frank Act. Before joining the OCC in 1997, Friend was minority general counsel to the House Banking Committee. She previously served as counsel to the committee and as counsel to the panel's Subcommittee on Consumer Affairs and Coinage. Friend succeeds Julie L.Williams, who retired from the OCC at the end of 2012 …
  • WASHINGTON (1/16/13)--The Treasury Department will not mint a trillion-dollar platinum coin to avoid the debt ceiling, the Washington Post reported Saturday. Neither the Treasury Department nor the Federal Reserve believes their authority should be used to produce of platinum coins for the purpose of avoiding an increase in the debt limit, Treasury spokesman Anthony Coley said. The idea of minting a platinum coin to invalidate the debt ceiling comes from some language added to the 1997 Omnibus Consolidated Appropriations Act. The intent was to help coin collectors who wanted the Treasury Department to mint cheaper platinum coins …

NCUA approves high-risk mortgage appraisal rules

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WASHINGTON (1/16/13)--The National Credit Union Administration and federal bank regulators have approved rules that will require lenders offering higher-risk mortgages to use licensed or certified appraisers.

The appraisers will need to prepare written reports, based on physical inspections of a home's interior, when they determine the value of a given home.

Mortgage lenders will also be required to provide homebuyers with a free copy of the resulting home appraisal report. If the seller of a given home has purchased the home for less than the current sale price within the last six months, an additional appraisal document will also need to be provided to the homebuyer. The document will need to detail the difference in sale prices, any changes in market conditions, and any improvements that have been made to the property since it was purchased by the current owner. This requirement is an attempt to address fraudulent property flipping.

High-priced mortgages will be considered non-qualified residential mortgages that are secured by a principal dwelling with annual percentage rates that exceed the average prime offer rate by 1.5% for first-lien loans, 2.5% for first-lien jumbo loans, and 3.5% for junior lien loans.

Safe harbors and exemptions will be provided in some cases.

The higher-risk mortgage appraisal requirements will go into effect on Jan. 18, 2014. The Credit Union National Association is analyzing the NCUA regulations and will post a summary soon.

The new mortgage appraisal requirements are mandated by the Dodd-Frank Wall Street Reform Act. They are a joint rulemaking effort between the NCUA, Consumer Financial Protection Bureau (CFPB), Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and other federal financial agencies.

For the full regulation, as approved by the FDIC on Tuesday, use the resource link.

The CFPB's version of these regulations will likely be released when that agency holds an Atlanta, Ga. mortgage issues hearing on Jan. 17. Pam Davis of Delta Community CU, Atlanta, Ga., and other credit union representatives from that state will join Georgia Credit Union League leaders at that hearing. Davis is set to speak on behalf of her credit union and CUNA during the hearing.

CUNA asks CFPB to use its 'considerable latitude' to set remittance compliance date

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WASHINGTON (1/16/13)--The Consumer Financial Protection Bureau (CFPB) should give credit unions and other financial institutions a minimum of one year to implement international remittance regulations, the Credit Union National Association has recommended.

"The agency has considerable latitude in determining a final compliance date," CUNA Deputy General Counsel Mary Dunn noted in a comment letter Tuesday. A delayed date "will help facilitate compliance for credit unions, particularly those who work with vendors, while minimizing regulatory burdens on credit unions," the letter added.

The CFPB recently proposed extending the remittance rule implementation period until 90 days after the revised final rule is released. The rule, required by the Dodd-Frank Wall Street Reform Act, was scheduled to take effect on Feb. 7.

The CUNA letter said this delay is welcome and thanked the agency for addressing some of the concerns that CUNA, CUNA's International Remittances Working Group, leagues and credit unions have raised regarding the remittance regulations.

Preliminary results from a CUNA survey of remittance providing credit unions has found that more than 40% of respondents will need about 12 months to implement the required changes.

Dunn said credit unions will need the extra deadline leeway to:
  • Develop new disclosures;
  • Test current and upcoming changes from vendors and third-party providers;
  • Make changes related to messaging, settlement, and payment systems; and
  • Evaluate and possibly amend operating rules, message formats, contracts, and participant agreements.
Under the CFPB's rule, remittance transfer providers would be required to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, 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, which are subject to additional liability for errors, will also be required to comply with dispute and error resolution provisions.

The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year.

CFPB regulatory counsel Eric Goldberg summarized the remittance proposal and answered credit union questions during a Monday teleconference hosted by CUNA. CUNA Director of Compliance Information Valerie Moss has highlighted noteworthy items from the teleconference in a CUNA CompBlog post.

CUNA continues to seek comments from credit unions and will be filing a second comment letter on additional substantive changes; comments on those revisions are due to the CFPB by Jan. 30.

For the comment letter, audio of the teleconference and a blog post on the teleconference, use the resource links.

Financial services, Ways and Means subcommittee spots are being filled

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WASHINGTON (1/16/13)--Several leadership and membership slots for House Financial Services and Ways and Means subcommittees were filled on Tuesday.

House Financial Services Committee Ranking Minority Member Maxine Waters (D-Calif.) named the following representatives to serve as ranking House Financial Services subcommittee members:

  • Rep. Carolyn Maloney (D-N.Y.), who will serve on the Capital Markets and Government-Sponsored Enterprises Subcommittee;
  • Rep. Al Green (D-Texas), who will serve on the Oversight and Investigations Subcommittee;
  • Rep. Gregory Meeks (D-N.Y.), who will serve on the Financial Institutions and Consumer Credit Subcommittee;
  • Rep. Michael Capuano (D-Mass.), who will serve on the Insurance, Housing and Community Opportunity Subcommittee; and
  • Rep. William "Lacy" Clay (D-Mo.), who will serve on the International Monetary Policy and Trade Subcommittee.
Waters in a release said these selections reflect the consensus of financial services committee members, and will need to be approved by the Democratic Policy and Steering Committee and the Democratic Caucus. Full Democratic subcommittee membership for the 113th U.S. Congress was also announced in that release. For more on those members, use the resource link.

House Financial Services Chairman Jeb Hensarling (R-Texas) announced subcommittee leadership late last month. (See Dec. 27 News Now story: More named to House Financial Services positions)

House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Sander Levin (D-Mich.) also announced their respective subcommittee leaders.

Rep. Charles Boustany (R-La.) will lead the Subcommittee on Oversight, and Rep. John Lewis (D-Ga.) will serve as ranking member. Rep. Pat Tiberi (R-Ohio) will lead the Subcommittee on Select Revenue Measures, with Rep. Richard E. Neal (D-Mass.) serving as ranking member. These subcommittees are of interest to credit unions: the oversight subcommittee investigates the tax exempt sector, and the select revenue measures subcommittee is in charge of tax reform.

Leaders for social security, trade, human resources and health subcommittees were also named. Levin also released full Democratic subcommittee rosters, but Camp said the remaining Republican subcommittee members will be named once the remaining vacant Republican position of the full Ways and Means Committee has been filled.

For more on the subcommittee selections, use the resource links.

Re-introduced Ross bill has no CU language

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WASHINGTON (1/16/13)--Rep. Dennis Ross (R-Fla.) late Monday re-introduced his bill to reduce the federal budget deficit. As he promised the Credit Union National Association late last year,  Ross corrected an inadvertent drafting error found in the original bill that threatened the federal income tax exemption for federal and state-chartered credit unions.

"Rep. Ross has a strong relationship with Florida credit unions and has been very open to us at CUNA. In fact, we met with his staff as recently as two weeks ago--the first day of the new Congress--to touch base with him and reiterate the value that credit unions bring to consumers," John Magill, CUNA executive vice president of governmental affairs said Tuesday.

"Exclusion of the credit union tax status from this legislation is consistent with Rep. Ross' statements to CUNA following the introduction of similar legislation in the 112th Congress. He remains a friend to credit unions and we look forward to working with him as the discussion about the federal budget and tax reform goes forward," Magill added.

Last year, CUNA identified language within the original bill (H.R.6474) that threatened credit unions' tax status. CUNA and the League of Southeastern Credit Unions immediately arranged meetings with Ross's office and a correction was promised.

As required by the rules of the U.S. Congress, any bill still in play when a session adjourns must be re-introduced in the new Congress to be considered.  Ross assured CUNA that the bill's language would be corrected before being re-introduced this year.

Reminder: Matz, Cordray available to CUs in Feb 5 webinar

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ALEXANDRIA, Va. (1/16/13)--There is still time for credit unions to register for a Feb. 5 webinar that will bring National Credit Union Administration Chairman Debbie Matz together with Consumer Financial Protection Bureau Director Richard Cordray to discuss recent developments.

The NCUA-sponsored session will feature a broad discussion of such topics as the CFPB's recently finalized Ability-to-Repay rule and a related proposed rule. That proposed rule would provide an alternative definition of Qualified Mortgage potentially applicable to thousands of credit unions with $2 billion or less in assets that originate 500 or less mortgages annually.

Webinar participants will be able to type in questions about any topic related to the credit union industry or the CFPB during the webinar. They also can submit advance questions at WebinarQuestions@ncua.gov. The subject line of the email should read, "NCUA-CFPB Town Hall."

Use the resource link below to register for the 3 p.m. (ET) webinar.

Inside Washington (01/15/2013)

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  • WASHINGTON (1/15/13)--The Senate is out of session this week, and the U.S. House will hold a shortened session before breaking on Wednesday. The House Republican Caucus has scheduled its policy retreat on Thursday and Friday of this week. Both chambers are expected to be in session next week following the presidential inauguration, but their agendas are expected to be light until President Barack Obama delivers his State of the Union Address on February 12 ...
  • WASHINGTON (1/15/13)--The U.S. government has filed court papers objecting to a plan by Residential Capital LLC, the bankrupt subprime mortgage lending unit of Ally Financial Inc., to pay up to $33.4 million in annual bonuses to about 3,000 of the company's 3,926 employees (American Banker Jan. 14 ). ResCap has operated under bankruptcy protection since May. Providing employees with annual discretionary payments that have historically been a part of their compensation is a normal component of conducting business, ResCap lawyers maintain. But ResCap's plan to pay bonuses cannot be considered ordinary business because the company sought bankruptcy protection with the goal of winding down its operations, U.S. Trustee Tracy Hope Davis said in court papers filed Thursday in U.S. Bankruptcy Court in Manhattan …

Relief comes three ways with NCUA 'small CU' action: CUNA

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ALEXANDRIA, Va. (1/15/13)--Credit unions will see some real regulatory relief after last week's National Credit Union Administration action to increase the asset-size threshold that defines a "small" credit union. The threshold was raised to $50 million as recommended by the Credit Union National Association, up from $10 million.

"There are at least three areas where this new threshold will make a real difference for covered credit unions struggling with regulatory burdens," CUNA Deputy General Counsel Mary Dunn said Monday.

The threshold increase means that two-thirds of all credit unions are exempt from the following NCUA rules:
  • Interest Rate Risk (IRR) regulations; and
  • Prompt corrective action (PCA) risk-based net worth requirements.
Also, for all future rulemakings, the NCUA must now consider credit union with less than $50 million in assets, rather than $10 million, in determining burdens and possible exemptions.

The NCUA's IRR rule requires credit unions to develop and maintain a written IRR policy and an IRR management program. The agency has also tied National Credit Union Share Insurance Fund coverage to compliance with this IRR rule, in some cases.

Under PCA rules for credit unions, as an institutions capital level deteriorates, its CAMEL rating goes up. When that happens, regulators are required to increase supervision and take actions meant to force management to make improvements.

Dunn said the NCUA's pending emergency liquidity rule is one rule that the agency may need to reconsider. That rule, as currently proposed, would:
  • Require federally insured credit unions (FICUs) with less than $10 million in assets to maintain basic written emergency liquidity policies;
  • Require FICUs with assets of $10 million or more to develop contingency funding plans describing how their credit union would address liquidity shortfalls in emergency situations; and
  • Require FICUs with assets of $100 million or more to have access to a backup federal liquidity source for emergency situations.
The threshold increase will also make assistance from the NCUA's Office of Small Credit Union Initiatives (OSCUI) available to more than 4,600 credit unions--an increase of 2,270. However, the agency has noted that OSCUI grants are still only available to designated low-income credit unions, not all "small" credit unions.

CUNA has also noted that the threshold increase does not impact the agency's determination of which credit unions get streamlined examinations. While that issue is under separate consideration, the $10 million threshold will continue to apply, at least for this year.

NEW: NCUA approves high-risk mortgage appraisal rules

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WASHINGTON (UPDATED: 3:30 p.m. ET, 1/15/13)--The National Credit Union Administration and federal bank regulators have approved new higher-risk mortgage appraisal requirements.

The regulations will require lenders offering higher-risk mortgages to use licensed or certified appraisers who prepare written reports, based on physical inspections of a home's interior, when they determine the value of a given home.

Mortgage lenders will also be required to provide homebuyers with a free copy of the resulting home appraisal report. If the seller of a given home has purchased the home for less than the current sale price within the last six months, an additional appraisal document will also need to be provided to the homebuyer. The document will need to detail the difference in sale prices, any changes in market conditions, and any improvements that have been made to the property since it was purchased by the current owner. This requirement is an attempt to address fraudulent property flipping.

High-priced mortgages will be considered non-qualified residential mortgages that are secured by a principal dwelling with annual percentage rates that exceed the average prime offer rate by 1.5% for first-lien loans, 2.5% for first-lien jumbo loans, and 3.5% for junior lien loans.

Safe harbors and exemptions will be provided in some cases.

The higher-risk mortgage appraisal requirements will go into effect on Jan. 18, 2014. The Credit Union National Association is analyzing the NCUA regulations and will post a summary soon.

The new mortgage appraisal requirements are mandated by the Dodd-Frank Wall Street Reform Act. They are a joint rulemaking effort between the NCUA, Consumer Financial Protection Bureau (CFPB), Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and other federal financial agencies.

For the full regulation, as approved by the FDIC today, use the resource link.

The CFPB's version of these regulations will likely be released when that agency holds an Atlanta, Ga. mortgage issues hearing on Jan. 17. Pam Davis of Delta Community CU, Atlanta, Ga., and other credit union representatives from that state will join Georgia Credit Union League leaders at that hearing. Davis is set to speak on behalf of her credit union and CUNA during the hearing.

Tell your exam stories now: CUNA survey deadline is today

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WASHINGTON (1/15/13)--Today is the final day for credit unions to detail their experiences with on-site National Credit Union Administration and state regulatory examinations by taking part in the Credit Union National Association's exam survey.

The survey asks credit unions to tell their examinations stories and to describe their satisfaction level with both the federal and state examinations process.

CUNA and state credit union leagues developed and released the short survey to give all credit unions a chance to describe the strengths and weaknesses of the system. The information gleaned from the survey responses will help CUNA and the leagues hone their exam issue advocacy efforts.

Survey replies are confidential, and identifying information from individual credit union respondents will not be seen by individuals outside of CUNA's Market Research Department. Only summary results will be reported.

CUNA members may use the resource link below to access the exam survey.

CUNA turns spotlight on CU concerns at second CFPB mortgage field hearing

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WASHINGTON (1/15/13)--Pam Davis of Delta Community CU, Atlanta, Ga., will bring credit union concerns regarding changing mortgage rules to the forefront during a Thursday Consumer Financial Protection Bureau (CFPB) field hearing.

Davis is one of 20 credit union representatives from across Georgia that are planning to attend the CFPB field hearing this week, alongside Georgia Credit Union League leaders. She will speak on behalf of her credit union and the Credit Union National Association.

CFPB Director Richard Cordray will speak during the event and field hearing attendees will also hear testimony of consumer groups, mortgage industry representatives, and members of the public. The league and credit union officials will also meet directly with CFPB Director Richard Cordray after the field hearing has concluded.

The hearing is scheduled to begin at 11 a.m. ET on Jan. 17 at the Rialto Center for the Arts at Georgia State University. This is the second hearing of its kind held this month. SECU of Maryland President/CEO Rod Staatz told the CFPB that "credit unions remain very concerned that they will be subject to a barrage of requirements even though they did not cause the financial crisis" during a Jan. 10 mortgage issues field hearing in Baltimore, Md. (See Jan. 11 News Now story: SECU's Staatz to CFPB: Contain CU reg burden)

CUNA anticipates that final rules addressing mortgage loan originator compensation, mortgage servicing and higher-priced mortgages may be released by the CFPB this week.

These regulations are among a number of final rules that the CFPB must release by Jan. 21.

Last week, the agency unveiled final rules regarding ability to repay requirements, escrow accounts, and "high-cost" mortgages. (See Jan. 11 News Now story: CFPB QM, ability-to-repay rules are out, CUNA provides summary)

Key rosters on Capitol Hill feature CU supporters

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WASHINGTON (1/15/13)--Committees of prime interest to credit unions continue to solidify their membership rosters for the 113th Congress, and Credit Union National Association Senior Vice President of Legislative Affairs Ryan Donovan notes a number of these committee members have close ties to credit unions.

"We see a lot of credit union friendly faces taking seats in these committee lineups," Donovan said. "We look forward to working with all members of key committees as the 113th Congress begins its work."

Donovan added, "While we have many credit union supporters in Congress, credit unions continue their hard work to educate all lawmakers about the credit union difference in 2013."

Among the credit union-friendly are:
  • Rep. Dave Camp (R-Mich.), chairman of the powerful House Ways and Means Committee, which writes the country's tax laws. Camp has praised credit unions for their consumer-friendly work, and has endorsed the tax status of credit unions; and
  • House Ways and Means ranking minority member Sander Levin (D-Mich.), who has repeatedly praised credit unions, and called re-examination of credit unions tax-exempt status unnecessary and unwise in the past.
Donovan noted that Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Orrin Hatch (R-Utah) have also had many positive things to say about credit unions. Support is similarly strong in the Senate Banking and House Financial Services Committees, he noted.

The majority of the 16 newly named House Financial Services Committee members received support from state credit union leagues and CUNA's Credit Union Legislative Action Council, and many have worked closely with their respective state leagues. New House Financial Services Committee member Denny Heck (D-Wash.) is one key credit union supporter in the new Financial Services Committee lineup. Heck is a former marketing director for Columbia CU, Vancouver, Wash., and was supported in his 2012 campaign by CUNA and the Northwest Credit Union Association.

Other financial services committee members that have worked closely with their state credit union leagues include:
  • Kyrsten Sinema (D-Ariz.);
  • Ann Wagner (R-Mo.);
  • Bill Foster (D-Ill.);
  • Mick Mulvaney (R-S.C.);
  • Joyce Beatty (D-Ohio); and
  • Dennis Ross (R-Fla.).

Inside Washington (01/14/2013)

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  • WASHINGTON (1/14/13)--National Association of State Credit Union Supervisors President/CEO Mary Martha Fortney said the National Credit Union Administration's final rule on the definition of "trouble condition" was "an improvement" on the originally proposed rule. "We appreciate that the NCUA listened to NASCUS state regulators and made it clear in the rule that NCUA may only declare a state credit union 'troubled' after an on-site examination and following consultation with the state regulator before making its determination," said Fortney. NASCUS questioned the need for a change to a rule that it said worked in most cases. NASCUS specifically stressed the possibility that with the change federally insured state-chartered credit unions face the prospect of being classified as "troubled" by NCUA without the agency having been at the credit union to become familiar with the institution. The Credit Union National Association is concerned that the change could have an adverse impact on the dual charter system (News Now Jan. 11). "The dual chartering is significant and worthy of being preserved because it facilitates credit union growth and member service by allowing a credit union to determine which regulators, state or federal, facilitate its operations better," said CUNA President/CEO Bill Cheney Thursday.…
  • WASHINGTON (1/14/13)--Sen. Jay Rockefeller (D-W.Va.) on Friday announced he will not seek re-election when his term ends in 2014. Rockefeller, a 30-year Senate veteran, said serving West Virginia in the U.S. Senate "is an abiding honor and privilege." The senator will continue to serve on the Senate Finance Committee, and Rockefeller said he would be a participant in tax and pension reform discussions …

Bachus joins GAC power lineup

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WASHINGTON (1/14/13)--Rep. Spencer Bachus (R-Ala), immediate past chairman and still a senior member of the House Financial Services Committee, is the latest big name added to the growing Credit Union National Association 2013 Governmental Affairs Conference (GAC) lineup.

Bachus has been named chairman emeritus to the committee this year. He will speak at the GAC at 11 a.m. ET on Feb. 27.



Thousands of credit union representatives are expected in Washington for this year's GAC, and Capitol Hill visits are always a pivotal part of the event. The GAC Hill visits in February are perfectly timed for impact on credit union issues as Congress continues discussion on tax and spending issues.

CUNA's GAC, from Feb. 24-28 at the Washington Convention Center, is the credit union movement's premier political event and its largest national conference. Each year, the GAC draws more than 4,000 credit union executives and board members to hear from influential leaders from Congress, presidential administrations and federal regulatory agencies.

This year's GAC theme, "Powerful Cause, Positive Effect," reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day.

House Majority Whip Kevin McCarthy (R-Calif.), House Financial Services Committee Chairman Jeb Hensarling (R-Texas), and credit union champion Rep. Ed Royce (R-Ca.) joined the GAC lineup in recent weeks, and more policymakers' names will be announced in the weeks ahead.

The 2013 GAC will also feature a point-counterpoint political discussion between former GOP and Democratic National Committee chairmen Haley Barbour and Terry McAuliffe. NBC News anchor and best-selling author Tom Brokaw and award-winning personal finance journalist and author Jean Chatzky are also scheduled to speak on that same stage.

ABBA tribute band ABBA The Concert will kick off the 2013 GAC on Feb. 24, and more speakers and session topics will be added to the 2013 GAC lineup in the weeks to come.

For more information, follow the @CUNAverse twitter hashtag #CUNAGAC. Use the resource link to register for the GAC.

aSmarterChoice use exploded in 2012, 2013 promises more

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WASHINGTON (1/14/13)--Nearly 385,000 visits were made to the Credit Union National Association's aSmarterChoice.org in 2012, and while those numbers are solid, CUNA is working to sustain--and improve--those numbers in 2013, CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile said Friday.

Gentile said CUNA is excited that aSmarterChoice.org is a growing resource for consumers to learn more about credit unions, and find a credit union that they can join.

"But there is plenty of room for growth so even more consumers can find their credit union and begin enjoying credit union service and the credit union difference," Gentile added.

aSmarterChoice.org is a joint project of CUNA and the American Association of Credit Union Leagues. It is aimed at helping create consumer awareness of credit unions and building membership.

The 2012 total of 385,000 visits to the website represents an almost 60% rise from 2011's total. These visits were made by more than 250,000 unique visitors, and of those visitors 218,000 completed successful first searches to find a credit union to join.

The strong 2012 numbers came on the heels of 2011's "Bank Transfer Day." That event alone drove aSmarterChoice.org to record more than 240,000 visits from 198,000 unique visitors by that year's end. 2011 featured a near stampede by consumers to find a credit union to join following Bank Transfer Day.

Overall, CUNA's aSmarterChoice.org has received 626,000 visits from more than 450,000 unique visitors since it first launched in February 2011. There have been more than 403,000 searches for credit unions, with nearly 229,000 successful on the first try, since the site was launched.

For more on aSmarterChoice.org, use the resource link.

NEW: CUNA members can call in on remittance rule changes today

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WASHINGTON (1/14/13)--Credit unions can dial in today for the Credit Union  National Association's free conference call for CUNA members that offer international remittance services.

The call, also targeted to state credit union league representatives, will explore pending changes to the Consumer Financial Protection Bureau's pending changes to its remittances rule.  Comments on the effective date of the proposed changes are due to the CFPB tomorrow.

This afternoon's call will be from 3 p.m. to 4 p.m. ET.

CFPB's Eric Goldberg, who helped draft the rule, will be on the first part of the call.

CUNA members can access the resource link below to reach CUNA"s Regulatory Advocacy home page for information to access the call.

CUNA CEO launches weekly 'Cheney Report' to member CUs

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WASHINGTON (1/14/13)--Upcoming congressional issues, recent mortgage regulatory releases and the latest National Credit Union Administration board actions are all covered in last week's first-ever edition of The Cheney Report.

The Cheney Report will deliver Credit Union National Association President/CEO Bill Cheney's latest thoughts on three to four key events and policy developments affecting credit unions into the email inboxes of credit union CEOs each Friday.

"The report gives readers a CEO-to-CEO perspective on each week's major developments, and provides a valuable window into CUNA's actions on behalf of member credit unions. It also reinforces the value of CUNA membership," CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile said.

Topics tackled in the first edition of The Cheney Report include:

  • The recent unveiling of the Consumer Financial Protection Bureau's new "ability to repay rule," with its qualified mortgage standards;
  • Congress, the fiscal cliff and tax reform; and
  • The NCUA's recently released small credit union definition changes.
Past issues of The Cheney Report will be archived on cuna.org.

Member service will be focus of NCUA LICU webinar

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ALEXANDRIA, Va. (1/14/13)--National Credit Union Administration staff will advise low-income credit unions on how they can improve and increase member service in an upcoming free webinar.

The webinar, entitled "Strategic Issues for Serving Low-Income Members," is scheduled to begin at 2 p.m. ET on Wednesday, Jan. 23.

During the webinar, NCUA Office of Small Credit Union Initiatives and Office of Consumer Protection staff will discuss:

  • How credit unions can strategically assess their current services to low-income members;
  • What changes can be made to improve services to low-income members; and
  • How the low-income designation can enhance their credit union's reputation and outreach.
NCUA representatives will also address the unique regulatory issues that LICUs using non-member deposits and secondary capital to serve the underserved may face.

Participants may submit questions ahead of the webinar by emailing WebinarQuestions@ncua.gov. The agency asks that participants use "Low-Income Strategies Webinar" in the subject line of their submitted questions.

To register for the webinar, use the resource link.

Collaboration model will be rewarded with $50K NCUA grant

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ALEXANDRIA, Va. (1/14/13)--Some clever innovator could soon be rewarded with a $50,000 National Credit Union Administration grant for submitting a good idea on how low-income credit unions can collaborate and better serve their members.

"Pursuing collaborations and developing new and innovative best practices can assist small credit unions competing in today's marketplace and add value to their membership," NCUA Chairman Debbie Matz said announcing the grant. She said that some of the best solutions to credit union issues can come directly from members or employees.

To qualify for the grant, a low-income credit union--or LICU--will need to partner with at least one other credit union. State credit union leagues and associations, additional credit unions, credit union service organizations and third-party vendors may also be added to the collaborative effort, the agency said.

The NCUA's Office of Small Credit Union Initiatives will evaluate grant applications based on the following criteria:
  • Substantial reduction of expenses for core credit union activity through collaboration;
  • Scalable collaborations that continue to grow;
  • Innovative collaborations that break new ground; and
  • Replicable ideas or projects that other credit unions can adopt.
Other factors will also be considered.

Applications will be accepted between Feb. 15 and March 15. The winning proposal will be announced no later than April 12, the NCUA said.

Funding for this grant is provided by the Community Development Revolving Loan Fund. For more on the NCUA grant program, use the resource link.

Credit unions of all sizes are looking for collaboration opportunities and partnerships in 2013. News Now late last year reported on the creation of Shared Service Solutions (S3), a groundbreaking collaboration among Bellco CU in Greenwood Village, Colo.; Bethpage FCU in Long Island, N.Y.; and State Employees CU in Linthicum, Md.

These credit unions have joined their call center operations into a single point of contact. They also plan to merge residential mortgage, consumer loan, credit and debit card and deposit processing resources. The initiative is expected to deliver savings of millions of dollars annually and to improve the membership's overall experience. (See Dec. 14 story: CUs' call center collaboration to cut costs, improve service)

Inside Washington (01/11/2013)

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  • WASHINGTON (1/11/13)--President Obama yesterday nominated White House Chief of Staff Jack Lew as the next Secretary of Treasury.  Last May, Lew was a surprise speaker at a White House meeting organized by the National Cooperative Business Association (NCBA) to highlight the International Year of Cooperatives. The NCBA delegation included members of the Credit Union National Association's Cooperative Alliances Committee.  In a question-and-answer session, Lew was asked if he'd ever been in a co-op.  At first he shook his head 'no,' until the group reminded him credit unions are cooperatives.  He said he has been a member of several credit unions
  • WASHINGTON (1/11/13)--The Federal Reserve Board on Thursday announced preliminary unaudited results indicating that its reserve banks provided for payments of about $88.9 billion of their estimated 2012 net income to the U.S. Treasury. Under the board's policy, the residual earnings of each Federal Reserve Bank are distributed to the U.S. Treasury, after providing for the costs of operations, payment of dividends, and the amount equal to surplus with capital paid-in. The federal 2012 estimated net income of $91 billion was derived primarily from $80.5 billion in interest income on U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities, and GSE debt securities …

CUNA will monitor 'troubled condition' change

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ALEXANDRIA, Va. (1/11/13)--The National Credit Union Administration's (NCUA) Thursday amended its definition of "troubled condition" and the Credit Union National Association (CUNA) is concerned that the change could have an adverse impact on the dual charter system.

"The dual chartering is significant and worthy of being preserved because it facilitates credit union growth and member service by allowing a credit union to determine which regulators, state or federal, facilitate its operations better," said CUNA President/CEO Bill Cheney Thursday.

"With this new NCUA rule, the federal agency could overrule a state regulator regarding a fundamental authority, the power to determine a credit union's CAMEL safety and soundness rating, even though limited to CAMEL 4 or 5 ratings," Cheney said.

The final rule amends the definition to allow either the NCUA or state regulators to declare a federally insured state-chartered credit union (FISCU) with a CAMEL 4 or 5 rating to be  in "troubled condition."

Under the previous definition, only a state supervisory authority could make that determination for a FISCU.

At the Thursday open meeting, the NCUA said it will not make a "troubled condition" declaration without first making an on-site visit to the credit union in question. Agency staff noted that the amended rule expands the NCUA's ability to act preemptively to ensure that the officials who take control of a FISCU in "troubled condition" are qualified to address its troubles, thus providing the National Credit Union Share Insurance Fund a further measure of protection against the risk of loss.

All 48 of the comment letters NCUA received on the proposed rule, including CUNA's, were opposed to it. Many said the rule represented "excessive federalism" and destabilized the dual charter system.

NCUA Chairman Debbie Matz countered that burdening the dual charter system is not the NCUA's intent. "The dual charter system works well, has worked well, and will continue to do so into the future," she said.

The rule goes into effect 30 days after its publication in the Federal Register.

For more on the NCUA meeting, use the resource link.

CFPB QM, ability-to-repay rules are out, CUNA provides summary

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WASHINGTON (1/11/13)--It's official. The Consumer Financial Protection Bureau (CFPB) standards to define a "qualified mortgage (QM)" under the agency's "ability to repay" rules are posted to the bureau's website and now may be considered "issued."

As indicated to Credit Union National Association (CUNA) President/CEO Bill Cheney in a Wednesday phone call from CFPB Director Richard Cordray, the CFPB has taken steps to address various CUNA concerns, including legal protection from challenges for noncompliance with qualified mortgage standards.

"We support the agency's steps to minimize disruptions in the availability of mortgage credit for consumers," said CUNA's Cheney Thursday. "CUNA strongly supported a 'safe harbor' approach for QM loans that would provide the maximum legal protection to credit unions under the 'ability-to-repay' rule."

Cheney added that the approach taken by the bureau "should provide legal certainty to lenders such as credit unions."

CUNA has created a summary of the final rules with credit union perspective. (Use the resource link below.)

Congress directed that the ability-to-repay rules include provisions that would help shield lenders whose loans meet QM standards if challenged in court by a borrower alleging the loan is not in compliance. The new CFPB rules take a dual approach to higher-priced loans and lower-priced ones regarding legal protection.

For lower-priced loans, the CFPB rule creates a "safe harbor" status for lenders. These prime loans generally are made to consumers who are considered to be lower-risk borrowers.

It is anticipated that most credit union mortgage loans would qualify for the safe harbor status, an outcome that CUNA has aggressively pursued. Consumers may challenge their loan under the new rule if they feel the loan does not meet the definition of a QM, but the safe harbor is intended to provide lenders with legal protection that QM standards have been met.

For higher-priced loans, sometimes given to consumers with insufficient or weak credit histories, the CFPB rules would allow a "rebuttable presumption" in legal challenges. A borrower seeking to challenge such a loan will have to prove he or she did not have sufficient income to pay the mortgage and other living expenses.

Additionally, the CFPB also posted final rules to its website for Home Ownership and Equity Protection Act (HOEPA) "high cost" mortgages and mortgage escrows, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. See today's News Now  for more information on these two rules.

Use the resource link to read the CUNA summary of the rule.

NCUA hikes small CU asset threshold to $50M, consistent with CUNA recommendation

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ALEXANDRIA, Va. (1/11/13)--The National Credit Union Administration (NCUA) Thursday increased the asset-level test that defines a small credit union. The threshold was raised to $50 million as
Click to view larger image In the NCUA boardroom Thursday, just moments after the regulators took action to increase the threshold that defines a "small" credit unions, NCUA Chairman Debbie Matz talks to Paul Gentile, CUNA's new EVP of strategic communications and engagement, about that and other credit union topics. (CUNA Photo)
recommended by the Credit Union National Association (CUNA), up from $10 million.

CUNA President/CEO Bill Cheney said, "Raising the threshold for the definition of 'small entity' is a step in the right direction, and we look forward to monitoring the effectiveness of this approach for credit unions."

He added, "In our comments to the agency, we suggested a threshold of $50 million for agency assistance and access--and a higher level for purposes of regulatory relief. We commend the agency for taking the action today, which will benefit many more small credit unions. CUNA continually looks for ways to assist small credit unions and we anticipate working with NCUA as it implements this new threshold."

The NCUA's change will make assistance from the NCUA's Office of Small Credit Union Initiatives (OSCUI) available to more than 4,600 credit unions--an increase of 2,270. The agency made it clear that the OSCUI will make changes to its procedures to handle the increased workload without adding additional staff.

Under the new rule, the NCUA will consider periodic changes to the asset-level test, initially every two years, and eventually every three years.

NCUA Chairman Debbie Matz said, "We will not be in a situation again where the definition lags reality."

Click to view larger image CUNA EVP of Strategic Communications and Engagement Paul Gentile (right), who came on board with CUNA Jan. 2, attended his first NCUA meeting in his new capacity yesterday. Gentile is shown here with NCUA board member Michael Fryzel to his right and NAFCU Executive Vice President of Government Affairs Dan Berger to Fryzel's right. Just this week, Berger was named to succeed retiring Fred Becker as head of NAFCU. That change takes effect July 31. (CUNA Photo)
The regulatory changes will go into effect in 30 days after publication in the Federal Register, which generally occurs within a week or two of an agency's adoption of a new rule. Credit unions that meet the regulatory definition for "small" have some additional flexibility when it comes to NCUA rules. The current $10 million small credit union asset threshold was set by the agency in 2003.

In CUNA's comment letter, CUNA demonstrated that using the "complexity index" as a method for determining small entity thresholds can or will be used in a variety of ways that could, ultimately, lead to negative or unintended results for credit unions. "Those include reductions in credit union flexibility, increases in risk profiles and reductions in member service provision," the letter stated.

The agenda for today's NCUA open board meeting also included: 
  • A board briefing on an interagency final rule addressing higher-priced mortgage loans;
  • The agency's 2013 annual performance plan;
  • A final rule to extend credit union low-income designation response time to 90 days, up from 30 days; and
  • Some technical amendments.

2013 plan is one of many issues in busy NCUA meeting

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ALEXANDRIA, Va. (1/11/13)--In addition to Thursday's small credit union and troubled condition definition actions, the National Credit Union Administration (NCUA) released its 2013 performance plan and addressed three other items.

The performance plan identified two new agency priority goals for 2013:
  • Monitoring and controlling risk in consumer credit unions, and reducing losses to the National Credit Union Share Insurance Fund; and
  • Dedicating resources to staff and train the new Office of National Examination and Supervision that will examine and supervise the largest consumer credit unions in 2014.
The agency also maintained the same four strategic goals it set in 2012: ensuring a safe, sound and healthy credit union system; promoting credit union access to all eligible persons; developing further a regulatory environment that is transparent and effective, with clearly articulated and easily understood regulations; and cultivating an environment that fosters a diverse, well-trained and motivated staff.

Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said CUNA will continue to press the NCUA on these goals, "particularly compliance with the goal of a transparent and effective regulatory environment."

Other items approved by the NCUA on Thursday include:
  • A final rule that extends the time qualified credit unions have to accept a low-income credit union (LICU) designation offered by the NCUA from 30 days to 90 days, and makes minor technical amendments to NCUA's insurance regulation to reflect current agency practices; and
  • A final rule that makes technical amendments to NCUA regulations regarding share insurance on various kinds of Treasury accounts.
The LICU deadline extension will give credit unions more time to respond to NCUA LICU eligibility notifications. The agency in August informed 1,003 federal credit unions of their LICU designation eligibility. NCUA Chairman Debbie Matz noted that more than 800 credit unions have accepted the designation. However, she said some asked for more time to "evaluate the benefits of having the designation, determine if the designation would be consistent with their strategic plans, and obtain approval from their boards."

The technical amendments will increase the standard maximum share insurance amount for various kinds of Treasury accounts to $250,000. The previous insurance cap was $100,000. The increase is mandated by the Dodd-Frank Wall Street Reform Act.

NCUA staff also briefed Matz and board member Michael Fryzel on the status of an interagency final rule that will amend Regulation Z to require appraisals for "higher-priced" mortgage loans. The final rule is expected to be released by Jan. 21, 2013, and NCUA staff said the effective date would likely be one year after the rule is issued.

SECU's Staatz to CFPB: Contain CU reg burden

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BALTIMORE, Md. (1/11/13)--SECU of Maryland President/CEO Rod Staatz noted Credit Union National Association (CUNA) concerns regarding regulatory burden in a Thursday Consumer Financial Protection Bureau (CFPB) mortgage policy field hearing.

"Credit unions remain very concerned that they will be subject to a barrage of requirements even though they did not cause the financial crisis," Staatz told the gathering.

Click to view larger image Credit Union National Association Senior Assistant General Counsel Jared Ihrig, left, and SECU of Maryland President/CEO Rod Staatz, right, pose with CFPB Director Richard Cordray at the agency's mortgage policy field hearing. The CFPB released regulations addressing qualified mortgage definitions, escrow accounts and high-cost mortgages on Thursday. (CUNA Photo) 
The field hearing was held just before the CFPB released a slate of new mortgage regulations later in the day. One of those regulations addressed the standards to define a "qualified mortgage (QM)" under the agency's "ability to repay" rules.

Staatz said at the hearing that the CFPB's safe harbor approach in the QM standards should be workable for consumers and lenders. (See related story: CFPB QM, ability-to-repay rules are out; CUNA provides summary.) Staatz thanked the CFPB for reaching out to credit unions as it developed the QM definition.

Credit unions also appreciate that the CFPB has expanded its coverage for "rural" and "underserved" areas, which will be beneficial to more consumers across the nation, he added.

Overall, CUNA and credit unions commend the CFPB's efforts and the agency's general appreciation of the work of credit unions, Staatz said, but drove home the CUNA warning about regulatory burden. "Credit unions provide affordable loans and competitive savings rates, and, as the only member-owned financial cooperatives in this country, want to ensure their members have access to reasonable information about their accounts." Regulatory burden impedes their ability to serve members, he noted.

The SECU president also said that his credit union's use of traditional member relationship lending practices has helped both members and SECU.

"It is critical that we maintain an excellent reputation in the community for serving members and that our lending practices are considered sound. If our members have marginal ability to repay, we work with them to help them improve their financial standing, not try and sell them a loan they can't afford," he said.

A second CFPB field hearing on mortgage policy is scheduled for Jan. 17 in Atlanta.

HOEPA, escrow rule changes issued by CFPB

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WASHINGTON (1/11/13)--The Consumer Financial Protection Bureau (CFPB) on Thursday unveiled final rules addressing high-cost mortgages and escrow accounts.

The high-cost mortgage rule expands the universe of loans potentially covered by the Home Ownership and Equity Protection Act, or HOWEPA, to include most types of mortgage loans secured by the borrower's principal dwelling. The list of covered loans now includes first-lien home purchase mortgage loans, subordinate-lien loans including closed-end home equity loans, and home equity lines of credit. 

The regulations will require lenders offering mortgage loans that exceed certain annual percentage rate and fee thresholds to disclose the terms, costs, and fees associated with a high-cost loan early in the homebuying process. Lenders also will need to certify that these borrowers have received homeowner counseling regarding the high-cost loan.

The CFPB in a release said the high-cost mortgage regulations will also:

  • Ban potentially risky mortgage features such as balloon payments and prepayment penalties for qualifying mortgages, with some exceptions;
  • Ban loan modification fees;
  • Set a late-fee cap of 4% of the amount of payment that is past due;
  • Prohibit lenders from rolling closing costs into the loan amount; and
  • Prevent lenders from charging fees when consumers request payoff statements.
The protections will not apply to reverse mortgage loans, certain government-sponsored loans, and construction loans that are taken out for the initial construction of a new home.

The escrow account changes will, in general, extend the required duration of a mortgage loan escrow account to five years. The current minimum duration is one year. Lenders that work in rural or underserved areas will be exempt from the escrow changes, provided they meet certain other criteria, the CFPB said.

Both of the final rules are mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The high-cost mortgage rules are scheduled to go into effect on Jan. 10, 2014. The escrow account rules are scheduled to go into effect on June 1, 2013.

The Credit Union National Association has created an outline of key points of the rules. (Use the resource link below.)

Also, see the resource links to read CUNA's comment letters on the HOEPA changes when they were proposed.

CU exec is new Boston Fed advisory council member

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WASHINGTON (1/10/13)--Edward Danek, Jr., president/CEO of Hartford FCU in Connecticut, will join three other credit union representatives on the 12-member Federal Reserve Bank of Boston First District Community Depository Institution Advisory Council (CDIAC) in 2013.

Danek is a first-time member of the CDIAC.

The other three current credit union representatives on the CDIAC are:

  • John Dwyer, Jr., president/CEO of New England FCU, Williston, Vt.;
  • Michael L'Ecuyer, president/CEO of Bellwether Community CU, Manchester, N.H.; and
  • James Blake, president/CEO of HarborOne CU, Brockton, Mass.
There are 12 CDIAC groups nationwide, with each group representing one Federal Reserve district. The district CDIACs are comprised of representatives from commercial banks, thrifts and credit unions with assets of $10 billion or less.

First district CDIAC members are drawn from Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.

The First District CDIAC's next meeting is scheduled for March 11.

The councils provide input to the Fed on the economy, lending conditions and other issues. The Fed selects one member from each of its 12 Fed local advisory councils to serve on the full CDIAC, and the council meets with the Fed in Washington, D.C., twice each year.

Inside Washington

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  • WASHINGTON (1/10/13)--A decision by regulators to provide banks time to comply with restrictions on swaps activities could penalize foreign banks operating in the U.S. (American Banker Jan. 9). Under the Dodd-Frank Act, banks are prohibited from using federal assistance such as federal deposit insurance or access to the discount window to support swaps activities (News Now Jan. 7). The new rules will force some banks to stop or divest their swaps businesses. The Office of the Comptroller of the Currency (OCC) said Jan. 3 banks will be provided more time to comply with restrictions. But foreign bank branches without deposit insurance do not qualify for the extension, and must soon move hedging activities that U.S. banks can maintain
  • WASHINGTON (1/10/13)--JPMorgan Chase CEO Jamie Dimon left the board of the Federal Reserve Bank of New York when his term expired Dec. 31. Lawmakers called for Dimon's resignation following JPMorgan's 2011 multibillion-dollar trading scandal (American Banker Jan. 9). The New York Fed's nominating committee has not recommended a replacement, a spokeswoman for the bank told the Banker. Among the lawmakers who called for Dimon's resignation was Elizabeth Warren (D-Mass.), who successfully ran for the U. S. Senate in 2011. Sen. Bernie Sanders (I-Vt.) introduced legislation that would prohibit bank executives from serving on the boards of regional Fed banks. A Government Accountability Office study cited by Sanders called on the Fed to prevent conflicts of interest on its regional bank boards …

NCUA says Telesis could cost NCUSIF $72M

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WASHINGTON (1/10/13)--The mid-2012 liquidation of Telesis Community CU could create an estimated $72 million in National Credit Union Share Insurance Fund (NCUSIF) losses, according to the National Credit Union Administration (NCUA).

The Chatsworth, Calif. credit union had 37,600 members and held $301.3 million in assets, core facilities, and consumer loans when it was liquidated by the NCUA last June. The California Department of Financial Institutions took Telesis into conservatorship in March 2012. The conservatorship resulted from "many problems," including problems tied to a low net worth ratio, negative returns on average assets, high loan delinquencies and charge-offs, high operating expenses, and many foreclosed and repossessed assets, the NCUA said last year. The California economy also affected the credit union.

Premier America CU of Chatsworth, Calif., assumed the assets and members once held by Telesis in a purchase and assumption deal that was completed after the Telesis liquidation.

Since the start of the financial crisis, four times the number of banks than credit unions have failed.

Cordray to Cheney: CFPB rules will include safe harbor for prime loans

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WASHINGTON (1/10/13)--The Consumer Financial Protection Bureau (CFPB) is expected to address the standards to define a "qualified mortgage (QM)" under the agency's "ability to repay" rules. The rules have not yet been released and are anticipated later today.

The Credit Union National Association (CUNA) will post its summary of the final rules with credit union perspective shortly after they are released.

CFPB Director Richard Cordray called CUNA President/CEO Bill Cheney Wednesday to discuss the rules and the changes advocated by CUNA on behalf of credit unions. Based on early information and summaries the agency has released this morning, the agency has taken steps to address various CUNA concerns, including legal protection from challenges for noncompliance with qualified mortgage standards.  

CUNA has been consistently seeking to minimize the impact of these rules on credit unions since they were ordered by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. As recently as Tuesday, CUNA sent another letter to the CFPB director addressing concerns about the mortgage rules and urging that the bureau bring its awareness of the credit union difference into play as it develops all new rules.

Also today, SECU of Maryland President/CEO Rod Staatz will testify on behalf of CUNA and credit unions at a CFPB Jan. 10 mortgage-policy field hearing in Baltimore, Md. He will drive home CUNA's message that the agency must direct its appreciation of the way credit unions operate into meaningful regulatory relief for credit unions so that they can do even more to serve their communities.

News Now will provide details of the new mortgage rules as soon as the rules are released.

Congress directed that the ability to repay rules include provisions that would help shield lenders whose loans meet QM standards if challenged in court by a borrower alleging the loan is not in compliance. CFPB information indicates the rules take differing approaches to higher-priced loans and lower priced ones regarding legal protection.

For lower-priced loans, the CFPB announced it created a "safe harbor" status for lenders. These prime loans generally are made to consumers who are considered to be lower risk borrowers.

It is anticipated that most credit union mortgage loans would qualify for the safe harbor status, an outcome that CUNA has aggressively pursued. Consumers could challenge their loan if they feel it does not meet the definition of a Qualified Mortgage but such a safe harbor is intended to provide lenders with legal protection that QM standards have been met.

For higher-priced loans, sometimes given to consumers with insufficient or weak credit histories, the CFPB indicated that legal challenges would involve a "rebuttable presumption." A borrower seeking to challenge such a loan would have to prove he or she did not have sufficient income to pay the mortgage and other living expenses.

The CFPB's summary also indicates requirements such as the following are included:

  • Before making a loan, a lender must document such things as a borrower's employment status; income and assets; current debt obligations; credit history; monthly payments on the mortgage; monthly payments on any other mortgages on the same property; and monthly payments for mortgage-related obligations;
  • Therefore, lenders would be banned from offering "no-doc" and "low-doc" mortgages--loans that don't ask for documentation of such things as income and assets; and
  • A borrower would need to show sufficient assets or income to pay back the loan and lenders must evaluate this information; and
  • Lenders would be prohibited from basing their evaluation of a consumer's ability to repay on teaser rates.

NEW: NCUA increases small CU asset threshold to $50 million; Consistent with CUNA recommendation

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ALEXANDRIA, Va. (1/10/13 UPDATED: 10:30 A.M. ET--The National Credit Union Administration (NCUA) today increased the asset-level test that defines a small credit union. The threshold was raised to $50 million as recommended by the Credit Union National Association (CUNA), up from $10 million.

CUNA President/CEO Bill Cheney said, "Raising the threshold for the definition of 'small entity' is a step in the right direction, and we look forward to monitoring the effectiveness of this approach for credit unions."

He added, "In our comments to the agency, we suggested a threshold of $50 million for agency assistance and access – and a higher level for purposes of regulatory relief. We commend the agency for taking the action today, which will benefit many more small credit unions. CUNA continually looks for ways to assist small credit unions and we anticipate working with NCUA as it implements this new threshold."

The NCUA's change will make assistance from the NCUA's Office of Small Credit Union Initiatives (OSCUI) available to more than 4,600 credit unions--an increase of 2,270. The agency made it clear that the OSCUI will make changes to its procedures to handle the increased workload without adding additional staff.

Under the new rule, the NCUA will consider periodic changes to the asset-level test; initially every two years, and eventually every three years.

NCUA Chairman Matz said, "We will not be in a situation again where the definition lags reality."

The regulatory changes will go into effect in 30 days after publication in the Federal Register, which generally occurs within a week or two of an agency's adoption of a new rule.  Credit unions that meet the regulatory definition for "small" have some additional flexibility when it comes to NCUA rules. The current $10 million small credit union asset threshold was set by the agency in 2003.

In CUNA's comment letter CUNA demonstrated that using the "complexity index" as a method for determining small entity thresholds can or will be used in a variety of ways that could, ultimately, lead to negative or unintended results for credit unions. "Those include reductions in credit union flexibility, increases in risk profiles and reductions in member service provision," the letter stated.

The agenda for today's NCUA open board meeting also included:

  • A board briefing on an interagency final rule addressing higher-priced mortgage loans;
  • The agency's 2013 annual performance plan;
  • A final rule to extend credit union low-income designation response time to 90 days, up from 30 days; and
  • Some technical amendments.
For more coverage of these items, see Friday News Now.

NEW: CFPB QM, ability-to-repay rules are out, CUNA provides summary

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WASHINGTON (1/10/13, UPDATED 5:18 p.m. ET)--It's official. The Consumer Financial Protection Bureau (CFPB) standards to define a "qualified mortgage (QM)" under the agency's "ability to repay" rules are posted to the bureau's website and now may be considered "issued."

As indicated to Credit Union National Association (CUNA) President/CEO Bill Cheney in a Wednesday phone call from CFPB Director Richard Cordray, the CFPB has taken steps to address various CUNA concerns, including legal protection from challenges for noncompliance with qualified mortgage standards.

"We support the agency's steps to minimize disruptions in the availability of mortgage credit for consumers," said CUNA's Cheney Thursday. "CUNA strongly supported a 'safe harbor' approach for  QM loans that would provide the maximum legal protection to credit unions under the 'ability-to-repay rule."

Cheney added that the approach taken by the bureau "should provide legal certainty to lenders such as credit unions."

CUNA has created a summary of the final rules with credit union perspective. (Use the resource link below.)

Congress directed that the ability-to-repay rules include provisions that would help shield lenders whose loans meet QM standards if challenged in court by a borrower alleging the loan is not in compliance. The new CFPB rules take a dual approach to higher-priced loans and lower-priced ones regarding legal protection.

For lower-priced loans, the CFPB rule creates a "safe harbor" status for lenders. These prime loans generally are made to consumers who are considered to be lower risk borrowers.

It is anticipated that most credit union mortgage loans would qualify for the safe harbor status, an outcome that CUNA has aggressively pursued. Consumers may challenge their loan under the new rule if they feel the loan does not meet the definition of a Qualified Mortgage, but the safe harbor is intended to provide lenders with legal protection that QM standards have been met.

For higher-priced loans, sometimes given to consumers with insufficient or weak credit histories, the CFPB rules would allow a "rebuttable presumption" in legal challenges. A borrower seeking to challenge such a loan will have to prove he or she did not have sufficient income to pay the mortgage and other living expenses.

Additionally, within the last hour, the CFPB has also posted final rules to its website for Home Ownership and Equity Protection Act (HOEPA) "high cost" mortgages and mortgage escrows, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. See News Now Friday for more information on these two rules.

Use the resource link to read the CUNA summary of the rule.

FTC report 'incomplete, misleading' on interchange: CUNA

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WASHINGTON (1/10/13)--A recent Federal Trade Commission (FTC) report on the impact of new laws capping interchange fee revenues presents an "incomplete and thus misleading view of the impact on credit unions," Credit Union National Association (CUNA) President/CEO Bill Cheney wrote in a letter to the agency.

The FTC's late 2012 report claimed that credit unions and other small issuers have been unharmed by new interchange laws.

Cheney in the letter sent this week noted that the 11-page FTC report includes only four paragraphs on the impact of debit interchange provisions on small banks and credit unions, and relies on "selective information" from Federal Reserve and Government Accountability Office (GAO) reports to reach its conclusions.

The report also fails to note that the full impact of the interchange cap regulations will not be known for some time. Routing and exclusivity provisions contained in the final interchange rule are also not discussed in the FTC report, Cheney added. CUNA recently made a similar point in an interview with The Washington Post.

The CUNA CEO also pointed out that the GAO report cited in the FTC document found that the average interchange fee received by credit unions and small banks declined by $0.02, or around 5%, after the interchange rule took effect. The GAO report also said that concerns remain about the potential for further interchange fee or fee income declines over the long term, Cheney emphasized.

The impact of an interchange fee cap is "a very important issue for credit unions and their members. Congress intended for credit unions and small banks to be exempt from the impact of the regulation of debit interchange fees, not just from the wording of key provisions of the rule. In order to ensure that outcome, it is imperative that agencies such as the FTC are as accurate as possible in reporting on debit interchange fees," Cheney wrote.

For the full letter to the FTC, and more on the Washington Post interview, use the resource links.

Matz talks CU issues in LEADERS magazine

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ALEXANDRIA, Va. (1/10/13)--Americans are becoming more aware of how critical credit unions are, and this increased interest "explains why credit unions have added nearly three million members since 2010," National Credit Union Administration (NCUA) Chairman Debbie Matz said in a new LEADERS magazine interview.

"Members know that they can usually get a better deal at a credit union," Matz said. She noted that cooperative, not-for-profit credit unions generally charge lower interest on loans, pay higher dividends on deposits, and are an excellent source for small business loans. "With the average business loan only $220,000, credit unions often make loans that banks turn away. In fact, while other institutions cut back lending during the financial crisis, credit unions gained further recognition as the only insured institutions to increase lending," she added.

LEADERS is a quarterly magazine featuring interviews about the thoughts and visions of leaders in government, business, academia, labor, religion, science and the arts. The state of the credit union movement and the agency's response to the financial crisis are also addressed in the interview.

The NCUA Chairman noted the agency "needed to act decisively to stabilize the credit union system" when the financial crisis hit in 2008. "Approximately 2,200 of the 7,000 credit unions were at risk, so we had to stabilize the system by rigorous supervision, rather than by regulation, which takes time," Matz added.

Credit unions weathered the financial crisis and its aftereffects, and the credit union industry is "exceptionally well-capitalized at over 10%," she noted. "Return on assets is 86 basis points, up from 18 basis points when I became chairman; and loan delinquencies and charge-offs are trending in the right direction--down," she added.

"These metrics indicate that the credit union industry is resilient and in a strong position," Matz said.

For the full LEADERS interview, use the resource link.

New NCUA video series informs consumers on CUs

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ALEXANDRIA, Va. (1/10/13)--In the first of a series of new consumer-focused videos, the National Credit Union Administration (NCUA) seeks to send one message to current and potential credit union members: Your money is safe.

NCUA Chairman Debbie Matz said the new series of NCUA Consumer Protection Report videos is one of many ways the agency is working to "communicate to consumers that their savings are insured up to $250,000--just like at banks."

Future videos will address financial planning, fraud and scam avoidance, and how to resolve consumer complaints at credit unions.

For more on the video, use the resource link.

A closer look: Leagues were busy in statehouses in 2012

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WASHINGTON (1/10/13)--'Gridlock' may have been the descriptor most often applied to legislative action on a federal level in 2012, but on a state level more than 29,000 bills--on issues across the board--were enacted by legislatures, according to the National Conference of State Legislatures. That was out of almost 86,000 bills introduced nationally.

Credit Union National Association's (CUNA) State Government Affairs tracked over 800 bills during the 2012 state legislative session to monitor potential impact on credit unions. This information was used by the state credit union leagues to advocate on behalf of credit unions in statehouses across the nation.

"Everything from state credit union acts to charitable giving to merger rules were in play in different states," noted Richard Dines, CUNA's senior state and league affairs director,  describing state actions. "CUNA and the state leagues advocated for credit-union friendly policy on all fronts."

The leagues were also nimble and persistent in their work to refute state bank associations' 2012 campaigns to challenge the tax treatment of credit unions. These attacks were seen in ad campaigns and other communications to legislators and the public in Illinois, Minnesota, Oregon, South Dakota, and Washington, and more are anticipated in 2013 as federal lawmakers work to revise the country's tax laws.   

Leagues were able to counter these attacks and stop them from gaining traction, and are prepared for more battles in the year ahead. 

Among other state legislative successes:

  • The leagues sought and won updates to their state credit union acts in California, Illinois, Kansas, Wisconsin, Arizona, and Rhode Island;
  • A new California law allows credit unions to provide lifeline services to non-members within a credit union's field of membership, including negotiable checks, money orders, and other similar money transfer instruments;
  • Updates to Illinois law clarified provisions on mergers, board authority, and membership;
  • In Kansas, updated provisions included changes to credit committee appointments, the loan approval process, and suspension of credit union officials and members;
  • Wisconsin law loosened restrictions on the amount of charitable donations that credit unions can make each year;
  • In Arizona, state-chartered credit unions now have parity with federally chartered credit unions with respect to the rules on converting to a savings and loan association; and
  • Legislation passed in Rhode Island gives state-chartered credit unions federal parity in the area of participation loans.
In 2012, states continued to debate legislation to reform their mortgage foreclosure laws, with a couple states passing laws in this area. California enacted new legislation that substantially changed its foreclosure law, but has a limited effect on credit unions since most provisions of the enacted legislation only apply to mortgage servicers that have more than 175 foreclosures per year.  

Illinois passed a fast-track foreclosure law that reduces the foreclosure process from about two years to about six months. 

The Illinois Credit Union League's instrumental efforts to get this bill pass are particularly notable because it may become a nationwide model for addressing the issue of vacant and residential properties in foreclosure.

News Now is featuring an in-depth look at each area of CUNA's 2013 priorities. This article is the third in that series. The first unveiled CUNA's legislative priorities; the second discussed regulatory goals.

Inside Washington (01/09/2013)

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  • WASHINGTON (1/9/13)--The Office of the Comptroller of the Currency (OCC) gave high priority to cash compensation for abused borrowers in discussing the $8.5 billion settlement with 10 mortgage servicers, American Banker reported Tuesday (Jan 8.). Borrowers will receive $3.3 billion in direct cash payments through the settlement. The OCC must still work out the details about how the money will be divided among borrowers. The settlement calls for banks to contribute to a central settlement fund, with the OCC to divide the money based on rough profiles of bank customers. Among the categories for distribution are borrowers in bankruptcy at the time of foreclosure and those were denied loan modifications …

EITC Day is opportunity for CU outreach

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WASHINGTON (1/9/13)--Earned Income Tax Credit (EITC) Awareness Day, which falls on Jan. 25, provides credit unions with a valuable community outreach opportunity, the Credit Union National Association (CUNA) notes.

The U.S. Internal Revenue Service (IRS) has encouraged charitable and social organizations, elected officials, state and local government agencies, employers, and others to join together and help generate extensive mainstream and social media coverage for the EITC on this day.

The EITC, which is a federal income tax credit that is intended to aid low-income working families, allows those that qualify and claim the credit to pay less federal tax, pay no tax, or get substantial tax refunds.

The agency said concerned parties need to work hard to reach community members that are eligible for the tax credit. Many that would be eligible for the EITC miss out on the benefits provided because they do not file federal tax returns, the IRS noted.

EITC eligible workers can receive up to $5,981 by claiming the credit on their 2013 federal tax returns, and can receive even more if they live in a state with a similar credit. "Four out of five people claim and get the EITC they earned but that leaves millions of people who miss boosting their income by claiming EITC," the IRS added.

Many credit unions also help low-to-moderate income and elderly taxpayers through the IRS's Volunteer Income Tax Assistance Program (VITA).

The National Credit Union Administration's (NCUA) Office of Small Credit Union Initiatives awarded more than $100,000 in technical assistance grants to low-income designated credit unions that operate or participate in VITA programs in 2011 tax year, the most recent year for which data was released. Credit unions that received the technical assistance grants helped more than 16,055 members prepare their tax returns, saving those members and their families $5.6 million in taxes, the NCUA said.

For more on the EITC, use the resource link.

NCUA flags new CU reg tools, exam improvements

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WASHINGTON (1/9/13)--National Credit Union Administration (NCUA) efforts to provide meaningful improvements to examinations and reduce regulatory burdens on credit unions are welcome, Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said Tuesday.

In the January edition of The NCUA Report, Chairman Debbie Matz said, "The agency continues to study the examination program carefully, looking for ways to…ultimately reduce burdens on credit unions wherever we can, consistent with safety and soundness."

Dunn noted that efforts to relieve burdens and improve exams are consistent with CUNA's 2013 Regulatory Advocacy strategy. CUNA knows that a number of credit unions have continuing concerns about examinations, she added. "That's why we developed our national exam survey, and will also work throughout the year with our Examination and Supervision Subcommittee to gauge credit unions' reactions to NCUA improvements."

Chairman Matz said the NCUA board in 2013 will also explore the creation of additional regulatory tools to give credit unions more capacity to manage risk, like the use of derivatives to hedge interest rate risk, a move that CUNA strongly supports.

The NCUA Report article also said the agency is developing better training and guidance in several areas. Pre-exam letters will communicate additional information about the exam process, and exam report cover letters will outline exam appeal options that are available to credit unions.

The NCUA chairman also previewed areas that agency examiners will emphasize in 2013, including:

  • How well credit unions put risk management controls in place when expanding the use of technology like online banking and social media;
  • Whether credit unions are appropriately managing earnings and capital without adding undue levels of interest rate, liquidity and credit risk;
  • How well credit unions control operational risk and maintain sound internal controls; and
  • Whether credit unions are actively managing the unique risks associated with unconventional products, such as investments in credit union-funded benefit plans or private student loan programs.
More detail on these areas of exam emphasis will be provided in a January Letter to Credit Unions, Matz noted.

For the full January NCUA Report use the resource link.

Also, CUNA member credit unions can participate in the CUNA examination survey until Jan. 15. More than 1,100 credit union representatives already have responded to CUNA's survey to share the strengths and weaknesses of their state and federal examination experiences. CUNA will use the confidential survey information to inform its advocacy efforts on behalf of credit unions to improve the examination process.

CUNA members may use the resource link to take the survey.

CUNA says CU difference must show in CFPB rulemaking

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WASHINGTON (1/9/13)--The Consumer Financial Protection Bureau (CFPB) should bring its awareness of the credit union difference into play as it develops any new rules, the Credit Union National Association (CUNA) urged in a Tuesday letter to agency director Richard Cordray.

CUNA President/CEO Bill Cheney wrote that credit unions do not always expect to be exempt from new regulations. However, he added, "There are a number of factors unique to credit unions that support liberal use of the CFPB's exemption authorities for our members, and we urge the agency to be as proactive as possible in considering how those authorities should be applied."

"We urge the agency to help direct its appreciation of the way credit unions operate into meaningful regulatory relief for credit unions so that they can do even more to serve their communities," he added.

CUNA also urged the bureau to focus more attention in 2013 on regulating entities in the financial marketplace that engage in abusive practices, such as payday lenders, that have been unregulated or under-regulated to date.

The call for a honed approach to regulation comes just before the CFPB is expected to release final versions of several mortgage regulations required under the Dodd-Frank Wall Street Reform Act.

The CUNA CEO said credit unions are most concerned about:

  • The CFPB's pending definition of "qualified mortgage" under the Ability to Repay proposal;
  • Whether the agency is going to expand the definition of "finance charge" under Regulation Z;
  • Key requirements in the mortgage servicing proposal; and
  • Provisions in the mortgage loan originator compensation proposal.
Cheney highlighted CUNA's advocacy efforts, which include supporting a delayed compliance date of up to 18 months, or 24 months in some cases, for new mortgage regulations. CUNA also has urged the CFPB to provide coordinated and achievable compliance dates with as much time as possible for institutions to reprogram systems and deal with the operational challenges the new mortgage rules will present, he noted.

For the full CUNA letter, use the resource link.

CFPB releases semiannual agenda

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WASHINGTON (1/9/13)--Mortgage rulemakings are among the top items featured on the Consumer Financial Protection Bureau's (CFPB) semiannual regulatory agenda, which was published in the Federal Register on Tuesday.

Items on the agenda that are in the final rule stage include regulatory changes that address:
  • Loan originator compensation (Regulation Z);
  • Mortgage servicing (Regulation Z);
  • Requirements for escrow accounts (Regulation Z);
  • Truth in Lending Act (TILA) ability to repay rules (Regulation Z);
  • TILA/Real Estate Settlement Procedures Act (RESPA) mortgage disclosure integration (Regulation X and Regulation Z); and
  • The Expedited Funds Availability Act (Regulation CC).
A regulation addressing small, women and minority-owned business lending data is also on the longer-term CFPB agenda, but may not be proposed this year, CUNA Senior Assistant General Counsel Jared Ihrig noted.

CUNA did expect the agency Truth in Lending Act (TILA)/Real Estate Settlement Procedures Act (RESPA) rulemakings to be released earlier in 2013. "We were thinking perhaps mid-year, but the agenda indicates September," Ihrig noted.

The Dodd-Frank Wall Street Reform Act also called on the CFPB to amend the Home Mortgage Disclosure Act (HMDA) data collection points, but that item does not appear on the agency's latest semiannual agenda, Ihrig said.

Since the bureau's inception, the agency has also collected data and information on everything from prepaid cards, credit cards, overdraft protection, checking account disclosures, elder abuse and student lending issues. However, Ihrig said, "It's still too early to tell which of these issues may rise to the forefront after the bureau completes the mortgage-related rulemakings required by the Dodd-Frank Act."

The next agenda will be published in spring 2013 and will update the bureau action agenda through October 1.

For the CFPB agenda, use the resource link.

FHA reporting changes a positive for some CUs: CUNA

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WASHINGTON (1/9/13)--A recent Federal Housing Administration (FHA) decision to ease financial reporting regulations for credit unions and other small financial institutions should be welcomed by credit unions involved in FHA lending, Credit Union National Association Senior Assistant General Counsel Jared Ihrig said.

"Small lenders," as determined by federal financial regulators, are now exempt from regulations that require internal control and compliance reports to be submitted to the FHA. Ihrig said these reports can be costly to obtain and maintain on an annual basis.

A regulatory relief measure that permits these same small financial institutions to submit unaudited regulatory reports to the FHA in place of audited financial statements is still in effect.

Small credit unions are defined as those with $30 million in assets or less by the National Credit Union Administration (NCUA). However, this threshold is scheduled to be addressed during this week's NCUA open board meeting, and could ultimately be changed.

FHA Loans are provided by many credit unions. The loans, which are insured by the FHA, offer low down payment and credit score requirements and reduced closing costs to eligible borrowers.

For an FHA letter on the financial reporting changes, use the resource link.

Former CU employee named to House Fin Services

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WASHINIGTON (1/9/13)--Former credit union employee and freshman congressman Denny Heck (D-Wash.) has been appointed to the House Financial Services Committee. Heck had Credit Union National Association (CUNA) and state credit union league backing during his election effort.

CUNA and the Northwest Credit Union Association (NWCUA) supported Heck with a $10,000 maximum contribution from the Credit Union Legislative Action Council and organized events on his behalf.

Click to view larger image From left to right: Marshall Ellison, TwinStar CU; Rep. Denny Heck (D-Wash.), when a candidate; Marilyn Ball-Brown, Generations CU; Phyllis Kaczmarski, TwinStar; Jeff Kennedy, TwinStar. (NWCUA photo)


CUNA's and the NWCUA's support was based not only on Heck's past employment at a credit union, but on his in-depth knowledge and stated support of credit unions and their issues, CUNA has said.

The House Financial Services Committee has jurisdiction over financial institutions' issues, federal housing policy, Wall Street reform and consumer protection, and commercial insurance.  Heck said in a release a seat on this panel was his top request for committee assignment.

"I'm thrilled to be named to the House Financial Services Committee. No sustainable economic recovery can occur in this country without a strong start in the housing sector…

"With major employers, credit unions, financial institutions, and a burgeoning tech-start up industry, Washington has a tremendous and growing stake in the work done under jurisdiction of the Committee," Heck said announcing his appointment.

Regs, consumer protection are topics of NCUA/CFPB webinar

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WASHINGTON (1/8/13)--The changing environment for financial regulation and consumer protection issue will be addressed during a Feb. 5 National Credit Union Administration (NCUA)/Consumer Financial Protection Bureau (CFPB) webinar.

NCUA Chairman Debbie Matz, who will host the free webinar, said the event will give credit unions a unique opportunity to ask questions directly to CFPB Director Richard Cordray.

The town hall is scheduled to begin at 3 p.m. ET.

The webinar agenda includes discussion of new developments in financial regulation, including CFPB's recently finalized regulations, proposed rules, and enforcement efforts, an agency release said.

The NCUA is accepting questions ahead of the webinar. Questions can be submitted to WebinarQuestions@ncua.gov. The agency asks that participants use "NCUA-CFPB Town Hall" in the subject line of their submitted questions.

To register for the webinar, use the resource link.

Inside Washington (01/08/2013)

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  • WASHINGTON (1/8/13)--Ten mortgage servicing companies have reached an $8.5 settlement agreement with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board over alleged foreclosure abuses. The agreement includes Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo, said the agencies' press release. The amount includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Fed and the Office of Thrift Supervision. The agreement entitles more than 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 to cash compensation. Eligible borrowers likely will receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error …
  • WASHINGTON (1/8/13)--Sens.Dean Heller (R-Nev.) and Tom Coburn (R-Okla.) have been appointed to the Senate Banking Committee. Heller and Coburn fill positions vacated by Sen. Jim DeMint (R-S.C.) and Sen. Roger Wicker (R-Miss.). DeMint resigned to lead the Heritage Foundation, a conservative think tank (American Banker Jan. 7). Wicker has taken different congressional committee assignments. Coburn may be familiar to credit unions because he successfully worked last year to expand a short-term extension of the National Flood Insurance Program into a Credit Union National Association-supported five-year extension. He previously served three terms in the House and joined the Senate in 2005. Heller, who previously worked in the financial services industry and served on the House Financial Services Committee, was backed during the fall election by Friends of Traditional Banking, a bank superPAC …

New Congress, same issues early on

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WASHINGTON (1/8/13)--After last week's swearing in ceremonies, members of the 113th U.S. Congress are preparing to take up many of the same tense issues faced by the last session.

Credit Union National Association (CUNA) Senior Vice President of Legislative Affairs Ryan Donovan said the mood on Capitol Hill during last week's swearing-in ceremonies seemed upbeat despite looming fights over such things as the country's debt ceiling and tax laws.

For now, Congress is out of session.  But federal lawmakers are scheduled to return before the inauguration of President Barack Obama on Jan. 21.

After that, Congress will hold organizational meetings for its myriad committees. The first regular meetings of those committees will likely take place in early February.

A closer look: CUNA 2013 goal is a better regulatory environment

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WASHINGTON (1/8/13)--"Credit unions need and deserve significant regulatory relief," Credit Union National Association (CUNA) President/CEO Bill Cheney emphacizes when talking about CUNA's goals for the year.  "That is why CUNA's 2013 regulatory advocacy initiatives and efforts will concentrate on improving the examination process, minimizing restrictions and maximizing flexibility for credit unions."

Cheney added that CUNA will continue efforts to coordinate with the state credit union leagues and CUNA Councils on regulatory advocacy issues and that CUNA will challenge regulatory burden on the legislative front as well.

On the regulatory side, CUNA, working closely with the New Jersey Credit Union League, developed a survey asking credit unions to describe the strengths and weaknesses of their state and federal regulatory examination experiences. The deadline for responses is Jan. 15. (CUNA members can use the resource link below to access the survey.)

In encouraging credit unions to participate, CUNA has said the survey results will provide a good picture of the current state of the exam process and help shape CUNA's discussions with the National Credit Union Administration (NCUA) and state supervisory authorities. (See related story: Exam survey sparks big response of CUS' stories.)

In addition to exam issues, CUNA's 2013 regulatory advocacy, including with the NCUA and the Consumer Financial Protection Bureau (CFPB), will be focusing on:

  • Containing new regulatory requirements, including from the NCUA and the CFPB, that limit credit unions' operations and divert them from serving their members;
  • Pressing for more regulatory latitude for well-managed credit unions;
  • Continuing to educate the CFPB and other regulators on credit union distinctions;
  • Urging increased regulation for unregulated entities in the financial marketplace, such as predatory lenders;
  • Seeking further improvements in the examination and appeals process;
  • Pursuing greater cost management of the NCUA's budget; and
  • Achieving enhanced congressional oversight of regulatory concerns.
When regulators take positive actions that facilitate the ability of credit unions to serve their members, CUNA will ensure credit unions are aware of those steps. Likewise, when there are concerns about a rule or other agency actions, CUNA will continue to identify those concerns to its credit union members and work with members to address them.

Also throughout the year, CUNA will be encouraging the NCUA and other regulators to utilize industry-based working groups to address regulatory issues and determine if a new rule is even needed or how it could be tailored to achieve the best results for credit unions and regulators alike. In 2012, the NCUA successfully used that approach when it formed a working group to allow credit unions to restructure a member's loan under the Troubled Debt Restructuring rule, a move CUNA strongly supported.

CUNA will also continue to address concerns about the NCUA budget and its process, specifically cost containment and accountability. In 2012, CUNA urged the agency to do more to make its resource allocation decisions transparent and to increase accountability to credit unions regarding its budget decisions. NCUA has established a new webpage with information about the agency's budget that previously was not available.

Use the resource link below for more from CUNA's regulatory advocacy department.

Last week, CUNA's Cheney identified the top priorities that will drive CUNA's action agenda in 2013: Protecting credit unions, easing their regulatory burden, and helping them prepare for the future.

News Nowis featuring an in-depth look at each area of CUNA's 2013 priorities. This article is the second in that series. The first unveiled CUNA's legislative priorities.



Use the resource links below to read more about CUNA's 2013 action agenda and legislative priorities.

Exam survey sparks big response of CUs' stories

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WASHINGTON (1/8/13)--More than 1,100 credit union representatives have responded to the Credit Union National Association's (CUNA) examination survey, illustrating the importance of the issues being addressed. However, there is still time for more voices to be heard as the Jan. 15 deadline approaches.

The survey gives credit unions a chance to detail their experiences with on-site regulatory examinations and discuss how satisfied they are with National Credit Union Administration (NCUA) and state examiner performance, and the results of those exams. Credit unions can also describe the strengths and weaknesses of their state and federal regulatory examination experiences.

"The strong response is no surprise," CUNA Senior Economist Mike Schenk said Monday. "We know there are issues out there. We are confident that the survey results will assist us in working with NCUA and state regulators to improve the exam process for credit unions."

Schenk said CUNA is eager to start working through the responses and "doing what it can to support credit unions from a regulatory advocacy standpoint." Advocating on behalf of credit unions to improve the examination process is one of the highest priorities of both CUNA and credit union leagues. (See related story: A closer look: CUNA 2013 goal is a better regulatory environment)

Survey replies are confidential, and identifying information from individual credit union respondents will not be seen by individuals outside of CUNA's Market Research Department. Only summary results will be reported.

The exam survey has been sent to all CUNA-affiliated credit unions except those in NCUA Region II, whose league already executed a similar poll.

CUNA members may use the resource link below to access the exam survey.

NEW: CUNA says CU difference must show in CFPB rulemaking

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WASHINGTON (UPDATED: 3:15 P.M. ET, 1/8/13)--The Consumer Financial Protection Bureau (CFPB) should bring its awareness of the credit union difference into play as it develops any new rules, the Credit Union National Association (CUNA) urged in a letter to agency director Richard Cordray today.

CUNA President/CEO Bill Cheney wrote that credit unions do not always expect to be exempt from new regulations. However, he added, "There are a number of factors unique to credit unions that support liberal use of the CFPB's exemption authorities for our members, and we urge the agency to be as proactive as possible in considering how those authorities should be applied.

"We urge the agency to help direct its appreciation of the way credit unions operate into meaningful regulatory relief for credit unions so that they can do even more to serve their communities," he added.

CUNA also urged the bureau to focus more attention in 2013 on regulating entities in the financial marketplace that engage in abusive practices, such as payday lenders, that have been unregulated or under-regulated to date.

The call for a honed approach to regulation comes just before the CFPB is expected to release final versions of several mortgage regulations required under the Dodd-Frank Wall Street Reform Act.

The CUNA CEO said credit unions are most concerned about:

  • The CFPB's pending definition of "qualified mortgage" under the Ability to Repay proposal;
  • Whether the agency is going to expand the definition of "finance charge" under Regulation Z;
  • Key requirements in the mortgage servicing proposal; and
  • Provisions in the mortgage loan originator compensation proposal.
Cheney highlighted CUNA's advocacy efforts, which include supporting a delayed compliance date of up to 18 months, or 24 months in some cases, for new mortgage regulations. CUNA also has urged the CFPB to provide coordinated and achievable compliance dates with as much time as possible for institutions to reprogram systems and deal with the operational challenges the new mortgage rules will present, he noted.

CUNA to address CFPB mortgage field hearing as rules unfold

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WASHINGTON (1/8/13)--The spotlight is set to shine this week on much-anticipated Consumer Financial Protection Bureau (CFPB) mortgage rule changes and the Credit Union National Association (CUNA) announced Monday that SECU of Maryland President/CEO Rod Staatz will testify on behalf of CUNA and credit unions at the CFPB Jan. 10 mortgage-policy field hearing in Baltimore, Md.

Also, CUNA anticipates that the bureau will release a number of its mortgage rule changes Wednesday, just ahead of that session.

Over the last two years, the Federal Reserve and the CFPB have issued a series of proposals to implement rule changes dictated by the 2010 Dodd-Frank Wall Street Reform Act. The regulators are now pushing up against a Jan. 21 deadline for adopting some of the final rules.

The reforms issues include:
  • Ability-to-repay/qualified mortgage regulations;
  • Loan originator compensation regulations;
  • Home Owner's Equity Protection Act regulations;
  • Mortgage servicing rulemakings that impact Regulation Z and Regulation X; and
  • Higher-risk mortgage appraisal regulations.
New escrow disclosure and waiver requirements are also expected to be finalized by the CFPB early this year. A final version of integrated Truth in Lending Act/Real Estate Settlement and Procedures Act disclosures, and accompanying rules, should be finalized by mid-2013.

CUNA continues to meet with the CFPB and urge improvements in all of these proposals and will keep credit unions posted as the new rules are issued, Dunn said.

For more on the CFPB hearings, use the resource link.

Tiny Milwaukee CU closed by regulator

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ALEXANDRIA, Va. (1/8/13)--New Covenant Missionary Baptist Church CU, a Milwaukee, Wis., credit union with a tiny membership of 294, has been liquidated by the National Credit Union Administration (NCUA). The credit union held $585,000 in assets.

The NCUA Monday reported that the Wisconsin Office of Credit Unions moved to close the credit union after it determined New Covenant was in an unsafe and unsound condition to transact its business and had no prospect of restoring viable operations. The NCUA was then appointed as liquidating agent.

The credit union was chartered in 1982 and served members of the New Covenant Missionary Baptist Church and related groups.

This was the first liquidation of a federally chartered credit union in 2013. There were 13 federally insured credit union liquidations in 2012.

For the full NCUA release, use the resource link.

CFPB credit access reg gets CUNA support, with tweaks

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WASHINGTON (1/8/13)--The Credit Union National Association (CUNA) supports a Consumer Financial Protection Bureau (CFPB) plan to address credit-access issues, but suggested some simple tweaks in a comment letter to improve the regulatory change.

For purposes of Regulation Z's ability-to-pay requirement, the CFPB proposal would allow credit card applicants who are 21 years of age or older to list funds of a spouse or partner to which the applicant has access. The proposal would change portions of Regulation Z that have in some cases limited the ability of stay-at-home spouses to secure new lines of credit.

CUNA in the comment letter suggested the agency clarify how credit unions and other credit card issuers will apply this revised standard once implemented.

The CFPB as it develops a final version of the proposal should also clarify that credit card issuers have sole discretion in determining:
  • whether a credit card applicant has "reasonable expectation of access" to the income of a spouse or partner; and
  • whether to extend credit to the consumer.
Further, the CFPB should provide supplemental guidance in regard to factors an issuer may choose to consider in determining "reasonable expectation of access," CUNA said.

The proposal applies to all applicants regardless of marital status, and the Bureau expects that it will ease access to credit particularly for stay-at-home spouses or partners who have access to a working spouse or partner's income.

For the full CUNA comment letter, use the resource link.

NAFCU's Becker to retire; Berger named successor

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ARLINGTON, Va. (1/8/13)--After 13 years at the head of the National Association of Federal Credit Union (NAFCU), Fred Becker has decided to retire effective July 31, 2013.

The NAFCU board of directors has named Dan Berger, NAFCU executive vice president of government affairs, to succeed Becker as president/CEO.

Berger joined NAFCU in January 2006 as senior vice president of government affairs. Three-and-a-half years later he was named executive vice president and in that post has managed five divisions.  Prior to joining NAFCU, Berger was vice president of government relations for America's Community Bankers and, before that, chief of staff for U.S. Representative Katherine Harris.

Credit Union National Association President/CEO Bill Cheney, hearing Becker's news, said Monday, "When I served as a member of the NAFCU board, I worked with Fred on a variety of issues. Congratulations to him on his service to the credit union movement; I wish him well in his future endeavors. I also look forward to working with Dan when he assumes his new role."

Inside Washington (01/07/2013)

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  • WASHINGTON (1/7/13)--The Office of the Comptroller of the Currency (OCC) said Thursday banks will be provided more time to comply with restrictions on swaps activities outlined in the Dodd-Frank Act. Under Dodd-Frank, banks are prohibited from using federal assistance such as federal deposit insurance or access to the discount window to support swaps activities (American Banker Jan. 4). The new rules will in effect force some banks to stop or divest their swaps businesses. Regulators, including the OCC, the Federal Reserve Board and the Federal Deposit Insurance Corp., had previously set an effective date of July 16. But Dodd-Frank allows a financial institution's primary regulator to extend the transition period. "An insured Federal depository institution that is or will be a swaps entity and that seeks a transition period for its nonconforming swaps activities should formally request a transition period from the OCC," said in the guidance. "The OCC is prepared to consider such requests favorably, provided that the requests conform to the guidance provided" …
  • WASHINGTON (1/7/13)--President Barack Obama must decide whether to re-nominate Tony West to become associate attorney general (American Banker Jan. 4). West's Senate confirmation process was disputed over when it is appropriate to charge banks with fair-lending violations. Last year, in a behind-the-scenes deal with the Justice Department, St. Paul, Minn., city officials agreed to drop their Supreme Court appeal of a case that many observers say would curtail the federal government's use of a controversial legal theory in fair-lending cases. In exchange for dropping the case, the Justice Department agreed not intervene in an unrelated lawsuit that could have yielded at least $180 million in damages for U.S. taxpayers, according to congressional Republicans. West, formerly the head of the Justice Department's civil division, was involved in the internal discussions that led to the St. Paul deal …

CUNA exam survey deadline is nearing

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WASHINGTON (1/7/13)--There is still time for credit unions to take part in the Credit Union National Association's (CUNA) examination survey, but that time is running out: the final deadline for responses is Jan. 15.

CUNA and state credit union leagues developed and released the short survey to give all credit unions a chance to describe the strengths and weaknesses of their state and federal regulatory examination experiences. Through the survey, credit unions can detail their own experiences with on-site examinations and discuss how satisfied they are with National Credit Union Administration (NCUA) and state examiner performance, and the results of those exams.

The information gleaned from the survey responses will help CUNA and the leagues hone their exam issue advocacy efforts.

CUNA will again remind credit unions that the deadline for responses is approaching in a Tuesday email.

Advocating on behalf of credit unions to improve the examination process is one of the highest priorities of both CUNA and credit union leagues. A firm grasp of the current state of credit union examination process is needed to ensure that credit unions are effectively represented by CUNA in discussions with the NCUA and state supervisory authorities.

Survey replies are confidential, and identifying information from individual credit union respondents will not be seen by individuals outside of CUNA's Market Research Department. Only summary results will be reported.

The CUNA/league exam survey has been sent to all affiliated credit unions except those in NCUA Region II. Those credit unions already have already participated in a similar survey spearheaded by the New Jersey Credit Union League.

CUNA members may use the resource link below to access the exam survey.

GAO report charts bank failures during crisis

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WASHINGTON (1/7/13)--The U.S. Government Accountability Office (GAO) last week released an extensive study detailing the causes and consequences of recent community bank and thrift failures that occurred between 2008 and 2011. The study does not address credit unions.

ommercial Real Estate (CRE) loan losses and the use of brokered deposits were common threads in many of the financial institution failures, the GAO study found. Failed banks "also had often pursued aggressive growth strategies using nontraditional, riskier funding sources and exhibited weak underwriting and credit administration practices," the report added.

Fair-value accounting has been cited as another potential factor in some failures, the GAO said. However, fair-value accounting losses in general "did not appear to be a major contributor" between 2007 and 2011, "as over two-thirds of small failed banks' assets were not subject to fair value accounting," the agency noted.

The report claimed that early recognition of loan losses could have alleviated some of the financial issues faced by banks. The GAO noted that a loan loss provision model proposed by the Financial Accounting Standards Board may help address the cycle of losses and failures that emerged in the recent crisis as banks were forced to increase loan loss allowances and raise capital when they were least able to do so.

The Credit Union National Association is analyzing the full 157-page report and will have more details to share soon.

For the full GAO report, use the resource link.

House Financial Services staffers named

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WASHINGTON (1/7/13)--New House Financial Services Committee Chairman Jeb Hensarling (R-Texas) has released his roster of senior committee staffers for the 113th Congress.

Hensarling's senior committee staff will consist of:

  • Staff Director Shannon McGahn;
  • Chief Counsel Jim Clinger;
  • Deputy Staff Director Kirsten Mork;
  • Parliamentarian and General Counsel Travis Norton; and
  • Deputy Staff Director for Communications Jeff Emerson.
Hensarling said his committee will "tackle a very busy agenda this year focused on reviving and strengthening the American economy and fostering the deepest, most liquid and innovative capital markets the world has ever known." The chairman said he looks forward to "working with this highly capable and experienced group of senior committee staff leaders."

For more on the staffers, use the resource link.

Hensarling sets committee sights on creating private flood insurance

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WASHINIGTON (1/7/13)--The new chairman of the House Financial Service Committee, Rep. Jeb Hensarling (R-Texas), has committed his panel to taking up the issue of flood insurance with a look at ways to privatize the flood insurance market.

In remarks to his House colleagues Friday, Hensarling called the existing National Flood Insurance Program (NFIP) "broke" and a taxpayer burden.

In the middle of 2012, Congress approved a five-year extension of NFIP and that legislation contained some reforms to the program. The Credit Union National Association (CUNA) strongly supported the extension for the certainly it lends credit unions as mortgage lenders.  Over time, the government program has been subject to almost a dozen short-term extensions--and even some lapses of authorization.

CUNA has said the erratic history has complicated the mortgage lending process and the longer-term extension helps ensure that credit unions--and the consumers they serve--can have a much greater degree of confidence in the lending process and the prospect of financing their homes.

Hensarling called the 2012 reforms "modest" and noted he has "long been critical" of government-provided flood insurance.

"As chairman of the Financial Services Committee, I wish to inform all members in this Congress, our committee will take up legislation to transition to a private, innovative, competitive, sustainable flood insurance market," he said Friday during debate on the $9.7 billion Hurricane Sandy aid package that was approved.

NEW: NCUA sues JP Morgan, WaMu, others over $22 billion in securities sales to corporates

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ALEXANDRIA, Va. (UPDATED: 10:30 A.M. ET, 1/7/12)--The National Credit Union Administration (NCUA) has filed suit against J.P. Morgan Securities as successor-in-interest to Washington Mutual Bank.

The agency alleges federal and state securities laws were violated when $2.2 billion of mortgage-backed securities were sold to three corporates.

J.P. Morgan Securities acquired Washington Mutual in 2008.

WaMu Capital Corp., Long Beach Securities Corp., and WaMu Asset Acceptance Corp. are also named as defendants in the suit.

The suit, which was filed late Friday in a U.S. District Court in Kansas, alleges that the firms made misrepresentations in connection with the underwriting and subsequent sale of $2.2 billion in mortgage-backed securities to three corporate credit unions--U.S. Central FCU, Western Corporate FCU and Southwest Corporate FCU.

The NCUA's complaint charges that underwriting guidelines in the offering documents were "systematically abandoned." Securities that were sold to the three corporates were "significantly riskier than represented in the offering documents," and the securities "were destined from inception to perform poorly," the NCUA complaint adds.

All three corporate credit unions failed as a result of these purchases, the NCUA alleges.

"The damage caused by the actions of firms like Washington Mutual has been extremely expensive to contain and repair, and that job isn't finished, yet," NCUA Chairman Debbie Matz said announcing the new lawsuit. "All the credit unions we supervise and insure have had to share this burden, so it's only right that the people who caused the damage be required to pick up that burden, as well."

This is the third time the agency has taken action against J.P. Morgan Securities. In December, in the largest suit filed by the agency, the NCUA took taken legal action against J.P. Morgan Securities and Bear, Stearns & Co. over $3.6 billion in mortgage-backed securities sold to four corporate credit unions.

The NCUA has also filed suit against Credit Suisse (USA), RBS Securities, Goldman Sachs, Barclays Capital and Wachovia, and each of these suits are progressing through the court system. The agency has settled with Citigroup, Deutsche Bank Securities, and HSBC, avoiding the cost of litigation and bringing in more than $170 million in funds that were lost due to the corporate credit union investments.

For the full NCUA release, use the resource link.

House majority whip, new Financial Services chair join GAC lineup

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WASHINGTON (1/7/13)--Two high-profile U.S. House members have been added to the growing Credit Union National Association (CUNA) 2013 Governmental Affairs Conference (GAC) lineup: House Majority Whip Kevin McCarthy (R-Calif.) and new House Financial Services Committee Chairman Jeb Hensarling (R-Texas).



McCarthy was recently elected to serve his fourth term in the House of Representatives, and remains a member of the House Financial Services Committee.

Hensarling, who officially began his stint as chairman of that committee when the 113th Congress convened last week, also served as Republican Committee chair in 2012 and was Republican Conference chair of 2011's Congressional Joint Select Committee on Deficit Reduction.



The 2013 GAC will also feature an enlightening point-counterpoint political discussion between national political stars Haley Barbour and Terry McAuliffe. Barbour, who was once called "the most powerful Republican in politics," has been hailed as one of the country's top political strategists. McAuliffe, former chairman of the Democratic National Committee (DNC) and Bill Clinton's re-election committee, most recently led Hillary Clinton's campaign for the Democratic nomination for president. The pair first encountered one another in the 1990s while respectively attacking and defending Clinton, have become friends as well as competitors, and are accustomed to sharing a stage.

NBC News anchor and best-selling author Tom Brokaw and award-winning personal finance journalist and author Jean Chatzky are also scheduled to speak on that same stage.

ABBA tribute band ABBA The Concert will kick off the 2013 GAC on Feb. 24, and more speakers and session topics will be added to the 2013 GAC lineup in the weeks to come.

The 2013 GAC will run until Feb. 28 at the Washington Convention Center.

This year's GAC theme, Powerful Cause, Positive Effect, reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day.

CUNA's GAC is the credit union movement's premier political event and its largest national conference, each year providing more than 4,000 credit union executives and board members an opportunity to hear influential leaders from Congress, presidential administrations and federal regulatory agencies.

For more information, follow the @CUNAverse twitter hashtag #CUNAGAC.

Use the resource link to register for the GAC.

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 NBCNews.com 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 …

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.

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.

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.

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.

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.

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).
later.

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.

Inside Washington (01/03/2013)

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  • WASHINGTON (1/3/13)--Regulators are close to a $10 billion settlement with 14 of the nation's largest banks that would end the government's efforts to hold lenders responsible for foreclosure abuses, The New York Times reported Monday. The deal would also likely put an end to recent warnings from independent consultants, the Government Accountability Office and lawmakers cautioning regulators that their foreclosure reviews were faulty, according to the American Banker (Jan. 2). A settlement could help resolve allegations of foreclosure mistakes and misconduct during the current review process, the Banker said. A random sampling of foreclosures showed that 11% of all foreclosures would require remediation payments or other compensation, Rep. Brad Miller (D-N.C.) and other members of Congress said during a 2012 hearing. Still to be determined is how regulators will distribute $3.75 billion in direct homeowner remediation payments …

NCUA to offer Jan 24 HMDA webinar

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WASHINGTON (1/3/13)--Ways to avoid common errors found on Home Mortgage Disclosure Act (HMDA) Loan Application Register (LAR) forms, form preparation tips, and management issues impacting credit unions that file the LARs will all be addressed during a Jan. 24 National Credit Union Administration (NCUA) webinar.

The webinar, entitled "HMDA: Accuracy and Timeliness," is scheduled to begin at 2 p.m. ET on Thursday, Jan. 24.

The NCUA Office of Consumer Protection will join Federal Reserve Board experts during the webinar to:

  • Address common errors identified in HMDA LAR data and submissions;
  • Provide tips for preparing and submitting accurate and timely HMDA LARs; and
  • Discuss financial institution management responsibilities in the HMDA process.
The NCUA is accepting questions ahead of the webinar. Questions can be submitted to WebinarQuestions@ncua.gov. The agency asks that participants use "HMDA Webinar" in the subject line of their submitted questions.

To register for the webinar, use the resource link.

CUNA, leagues are active as 113th Congress begins

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WASHINGTON (1/3/13)--The 113th U.S. Congress officially begins today as members are scheduled to be sworn in this afternoon, and the Credit Union National Association (CUNA) and state credit union leagues are already in action, welcoming new members and advocating for key credit union priorities as the 2013 legislative calendar begins.

CUNA representatives and members of credit union leagues from Missouri, North Carolina, Ohio, Texas and Kentucky will attend legislator open houses and swearing in ceremonies this week.

Organizational resolutions and other official business will likely be the only actions taken by the 113th Congress this week, and both 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 will be 14 new senators and 84 new House members in the new Congress. Some of the newly elelcted members of Congress incorporated increasing credit union member business lending (MBL) authority and other key credit union issues into their campaign platforms. Overall, the Credit Union National Association (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.

The return and influx of credit union-friendly candidates could boost MBL legislation progress during this session of Congress, said CUNA Senior Vice President of Political Affairs Richard Gose.

CUNA, the state credit union leagues, credit unions and members of Congress late last year backed MBL cap increase legislation as a way to help small businesses. House (H.R. 1418) and Senate (S. 2231) MBL bills gained strong support, earning 145 and 22 backers, respectively. Both bills will need to be reintroduced in this Congress.

The MBL bills would increase the 12.25%-of-assets credit union member business lending (MBL) cap to 27.5% of assets. CUNA has estimated that the proposed MBL cap increase could inject $13 billion in funds into the economy, creating as many as 140,000 new jobs in the first year following enactment.

Maintaining the credit union tax status, addressing housing finance reform issues, decreasing regulatory burdens faced by credit unions and increasing credit union access to supplemental capital are other key items for CUNA and credit unions during this session of Congress. (See related story: CUNA sets four-pillar legislative agenda for 2013.)

Cheney identifies 2013 action agenda

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WASHINGTON (1/3/13)--Credit Union National Association (CUNA) President/CEO Bill Cheney Wednesday named the top priorities that will drive CUNA's action agenda in 2013.

"CUNA's 2013 priorities fall into three key categories: Protecting credit unions, easing their regulatory burden, and helping them prepare for the future," said the CUNA leader.

"Protecting the credit union tax exemption tops our list of ten 2013 priorities for good reason," Cheney said. "It is widely expected that comprehensive tax reform will be on the legislative agenda next year.

"As part of that process, the credit union tax status is likely to be examined and could come under significant threat--particularly since we know the banks will continue their paid media and lobbying barrage urging credit union taxation." (See related story: A closer look: CUNA sets four-pillar legislative agenda.)

Here is CUNA's list of top ten priorities for the year:

  • Protect and defend the credit union tax exemption;
  • Reduce credit union regulatory burden and improve their operating environment through both legislative and regulatory initiatives;
  • Ensure comprehensive compliance support;
  • Enhance the credit union charter to include such changes as increased member business lending authority and supplemental sources of capital;
  • Maintain marketplace flexibility and preserve credit unions' ability to set the price points that match the needs and capacities of their members;
  • Engage in housing finance reform;
  • Build credit unions' 'Plan to Win' and implement a system that will allow the passage of important pro-credit union legislation by adopting a "535-seat" strategy in which credit unions effectively reach out to all members of the U.S. Congress;
  •  Unveil a new "Strategic Vision" for the credit union movement;
  • Enhance communications to credit unions, consumers and the media; and
  • Work "hand-in-glove" with credit union leagues at the state level.
Starting with today's issue, News Now will feature an in-depth look at certain CUNA 2013 priorities.  Today's issue discusses legislative priorities in "A closer look: CUNA sets four-pillar legislative agenda." The Jan. 7 edition will feature details on CUNA's regulatory priorities. Additional features will follow.

CUNA seeks comment on recent remittance changes

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WASHINGTON (1/3/13)--The Consumer Financial Protection Bureau (CFPB) late last month unveiled a series of revisions to its still-pending remittance regulation proposal, and the Credit Union National Association (CUNA) is seeking credit union comment on these changes through a new online survey and a comment call.

The recent remittance rule revisions are slight tweaks to CFPB-proposed remittance regulations.

The CFPB said the revisions would:
  • Provide increased flexibility and guidance with respect to the disclosure of taxes imposed by a foreign country's central government as well as fees imposed by a recipient's institution for receiving a remittance transfer in an account;
  • Require disclosure of foreign taxes imposed by a country's central government, but eliminate a previous requirement to disclose taxes imposed by foreign regional, provincial, state, or other local governments; and
  • Extend the remittance rule implementation period until 90 days after the revised final rule is released. The rule was scheduled to come into effect on Feb. 7.
These changes were among the revisions urged by CUNA in several meetings with the bureau.

The CUNA survey and comment call follow up a September CUNA release that sought comment on the broader CFPB remittance proposal. Deputy General Counsel Mary Dunn said CUNA took the unusual step of releasing a second comment call and survey due to the tight comment deadline the CFPB has imposed.

The agency is accepting comment on the remittance implementation period changes until until Jan. 15, and is accepting comment on the broader CFPB revisions until Jan. 30.

CUNA has asked credit unions to complete the remittance survey and respond to the Comment Call by Jan. 22. CUNA asks for comment on the delayed effective date by Jan. 11.

For the remittance survey and comment call, use the resource links.

A closer look: CUNA sets four-pillar legislative agenda

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WASHINGTON (1/3/13)--The Credit Union National Association (CUNA) will explore every option and take every opportunity to represent credit unions on Capitol Hill in 2013, said CUNA President/CEO Bill Cheney Wednesday as he unveiled CUNA's 2013 legislative priorities.

"It's time to take our substantial 2012 successes and continue to build a great future for credit unions," Cheney declared.

A key issue on CUNA's 2013 legislative priorities agenda is the preservation of the credit union federal tax status. The tax status is likely to be examined this year as the 113th U.S. Congress scrutinizes comprehensive tax reform. (See related story: Cheney identifies CUNA 2013 action agenda.)

Overall, the CUNA legislative agenda this year will have four pillars:  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.

The statutory credit union tax status provides credit unions with an exemption from federal income tax because of their cooperative business structure. CUNA and the state credit union leagues are prepared to wage a public advocacy campaign in support of current law. It will encompass a comprehensive and deliberate grassroots, communication and legislative strategy.

CUNA has always maintained that the statutory tax status is as relevant today as it was when granted. In 1917, the U.S. Attorney General--and later the U.S. Congress--exempted credit unions from a federal income tax obligation because of their organization structure: Credit unions are member-owned, not-for-profit financial cooperatives.

The exemption, in effect since credit unions' inception in the United States, has been reaffirmed many times, including in 1935, 1936, 1937, 1951 and 1998.

A second pillar of the CUNA legislative agenda: To address what CUNA has come to call the "crisis of creeping complexity" with respect to regulatory burden.

This is an area in which CUNA had a series of victories in 2012.  Despite the gridlock that gripped Washington throughout the year--right up to and through the "fiscal cliff" negotiations this week--CUNA was able to secure a number of regulatory relief measures. Some examples include:

  • The president signed a CUNA-supported bill into law Dec. 21 that eliminates a duplicative and burdensome requirement that a fee notice be posted on an ATM machine, in addition to the electronic notice that appears on the screen prior to the transaction. The dual requirement had  created legal and financial issues for some credit unions and other financial institutions; and
  •  Signed into law the same day was a CUNA-backed measure (H.R. 4014) intended to ensure that groups or individuals that supply information to the Consumer Financial Protection Bureau (CFPB) would not waive their right to privacy protections.
The remaining two of CUNA's four legislative pillars are engaging in housing finance reform and advancing charter enhancements.

Working with its Housing Finance Reform Task Force, CUNA is prepared to deeply engage with Congress' efforts to reform Fannie Mae and Freddie Mac, expected to be a top priority of House Financial Services Committee Chairman-designate Jeb Hensarling (R-Texas).

CUNA will continue to pursue charter enhancements that improve the operating environment for credit unions. Two major initiatives that remain as priorities from 2012 are supplemental capital and increased member business lending.

For supplemental capital to advance, CUNA and the leagues will continue to educate and generate support for the issue within the credit union system and raise it in the context of Congress' consideration of bank capital issues, such as Basel III rules. 

In 2012 CUNA supported H.R. 3993, which would modify the definition of credit union net worth to include supplemental forms of capital for credit unions. It was referred to the House Financial Services subcommittee on financial institutions and consumer credit for consideration.

CUNA and the leagues also will work to continue progress of legislation in both the House and Senate that would increase the credit union member business lending cap to 27.5% of assets, up from 12.25%. MBL bills (H.R. 1418/S. 2231) enjoyed strong support in both chambers with 145 backers in the House and 22 in the Senate.  

In 2013, CUNA intends to seek the reintroduction of legislation in both chambers to permit experienced credit unions to continue to lend to their small business members. (See related story: CUNA, leagues are active as 113th Congress begins.)

With banner 2012, CULAC looks forward

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WASHINGTON (1/3/13)--The Credit Union Legislative Action Council (CULAC) had a banner year in 2012, raising more than $2 million to support credit union-friendly candidates, Credit Union National Association (CUNA) Senior Vice President of Political Affairs Richard Gose reported Wednesday. CULAC is CUNA's political action committee (PAC).

The $2 million funding total is the largest single-year total recorded by CULAC, and it shows that credit union supporters nationwide are "fired up and ready to support credit union candidates," Gose said. CULAC raised a total of $3.93 million in 2011 and 2012, combined, for the two-year election cycle.

Gose said CULAC aims to maintain its growth momentum going into the next electoral cycle. CULAC's goal is to have more resources for its independent expenditures and partisan communications going forward, he added.

Altogether, CUNA, CULAC and state credit union leagues spent $4.15 million to support pro-credit union candidates in the 2012 federal elections. Nearly $1 million of those funds went to independent expenditures leading up to the November elections, and CULAC spent $3 million on candidate contributions. CUNA and leagues also spent more than $300,000 in additional funds to support partisan communications.

CUNA and CULAC supported candidates in 361 U.S. House races and 33 U.S. Senate races, and in 96% of those races the credit union-friendly candidates won.

CULAC was the most bipartisan PAC in opensecrets.org's list of the top 20 PAC contributors for the 2012 elections, with funding nearly evenly divided between the two major parties.

Advocacy efforts made in 2012 took on several forms, including radio advertising, direct mail, and CUNA's first forays into new media political advocacy. These new media efforts included demographically targeted online advertising on web-based media platforms such as social media site Facebook, online radio site Pandora, and banner or sidebar ads on various websites. Candidates also received search-based advertisement placement through Google's AdWords product.

Dan Maffei (D-N.Y.), Chris Collins (R-N.Y.) and Iowa candidate Kristie Vilsack (D) received the new media support, and while these online projects represented a small portion CUNA's overall independent expenditure budget, "they were another worthy avenue to educate voters and mobilize and activate supporters for our candidates," CUNA Vice President of Political Affairs Trey Hawkins said.

Senate confirms Treasury OFR director

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WASHINGTON (1/3/13)--The U.S. Senate this week confirmed Richard Berner to serve a six-year term as the U.S. Treasury's first Office of Financial Research (OFR) director.

Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said CUNA plans to meet with Berner soon.

Berner was approved by a voice vote on Jan. 1. He has served as Counselor to the Secretary of the Treasury since April 2011, helping Treasury Secretary Tim Geithner set up the OFR.

The OFR was set up under the Dodd-Frank Wall Street Reform Act and is charged with helping regulators avoid any future systemic crisis by measuring risk and monitoring how the financial system is evolving.

Geithner on Wednesday said Berner has been instrumental in laying the groundwork for the OFR to support Wall Street reform, including improving financial data and serving the Financial Stability Oversight Council.

The OFR held its inaugural advisory committee meeting last month. In that initial meeting, the committee asked financial industry players how it can improve collection and analysis of financial data to detect systemic threats.

Convicted embezzler banned from FI work by NCUA

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ALEXANDRIA, Va. (1/2/13)--Giovanna Liranzo, a former employee of McCoy FCU in Orlando, Fla., has been banned by the National Credit Union Administration (NCUA) from any future work at a federally insured financial institution.

The NCUA said Liranzo was convicted of embezzlement and misapplication of credit union funds and was sentenced to 15 months in prison, three years supervised release and ordered to pay restitution in the amount of $161,125.03.

To view this and earlier NCUA enforcement orders, readers can use the resource link below or visit NCUA's Office of General Counsel between 9 a.m. and 4 p.m. (ET) Monday through Friday. Paper copies may be ordered by mail from NCUA, 1775 Duke St., Alexandria, VA 22314-3428.

The agency also makes available links to the enforcement actions of other federal regulators against other institutions or their affiliated parties, which can be accessed via the second link below.

Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

2013 HMDA threshold set by CFPB

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WASHINGTON (1/2/13)--Credit unions and other financial institutions with total assets of less than $42 million as of Dec. 31, 2012 will not need to collect and report Home Mortgage Disclosure Act (HMDA) data in 2013, the Consumer Financial Protection Bureau (CFPB) said last week.

Under HMDA in 2013, financial institutions with total assets of more than $42 million that have home or branch offices in defined metropolitan statistical areas must collect certain mortgage loan data and report it to federal regulators. The HMDA reporting threshold stood at $41 million in 2012.

Credit Union National Association (CUNA) staff have emphasized that a credit union's exemption from collecting HMDA data in 2013 does not affect its responsibility to report the data it is required to collect during 2012.

The Federal Financial Institutions Examination Council (FFIEC) has also posted information on its 2013 HMDA and Community Reinvestment Act data entry software. For that information, use the resource link.

Interchange issues impacting small issuers, Wash Post reports

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WASHINGTON (1/2/13)--In an article that extensively quotes Credit Union National Association (CUNA) Chief Economist Bill Hampel, the Washington Post reported that credit unions and other small issuers are reporting reduced debit card processing revenues as a result of recent interchange regulation changes.

The Federal Reserve Board's final rule implementing interchange changes caps debit interchange fees for issuers with more than $10 billion in assets at 21 cents. An additional five basis points per transaction may be charged to cover fraud losses, and an extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards. Most credit unions are exempt from the fee cap, but CUNA has repeatedly warned that the exemption will not insulate credit unions and other small issues and they will be adversely impacted by the big-issuers' interchange cap.

The Washington Post item directly questions the recent claims of a December Federal Trade Commission (FTC) report (News Now, Dec. 31) that small issuers have been unharmed by the interchange regulations. The Post story noted that credit unions and community banks have called the FTC report premature, and have said the results of the FTC survey do not reflect the true impact that interchange regulations have had on smaller institutions. The story also noted that small financial institutions have had to consider, in some cases, charging new fees to cardholders to offset revenue losses created by the interchange changes.

CUNA's Hampel in the Post story pointed out that  the interchange provision "that could really start to lower interchange revenues for smaller institutions took effect in April, and in the only full quarter since then, the third quarter of 2012, we saw the first-ever decline in interchange revenue for credit unions.

"We are concerned about whether that was a one-time downward shift or the first of several quarters of decline," he added.

CUNA Deputy General Counsel Mary Dunn last week took issue with the FTC's interchange claims, and CUNA is planning to outline concerns regarding the FTC's report in an upcoming letter to the agency.

Dunn said all aspects of the interchange cap law must continue to be monitored and assured credit unions that CUNA's work on these issues will continue. (See Dec. 31 News Now story: Small issuer concerns remain despite FTC interchange report: CUNA)

CFPB mortgage rules among early 2013 actions: CUNA

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WASHINGTON (1/2/13)--Many mortgage regulations that the Federal Reserve and the Consumer Financial Protection Bureau (CFPB) have proposed over the last two years are scheduled to be finalized in early 2013, setting up a busy year for both regulators and the regulated, the Credit Union National Association (CUNA) notes.

Among the biggest items on the CFPB's docket are ability-to-repay/qualified mortgage regulations, which will need to be finalized by Jan. 21. Under the Dodd-Frank Wall Street Reform Act, no creditor may make a residential mortgage loan unless the creditor makes a reasonable and good faith determination based on verified and documented information that, at the time the loan is consummated, the consumer has a reasonable ability to repay the loan. If the loan is a qualified mortgage, the creditor may presume that the ability to repay test has been met.

This rule has the ability to reshape the mortgage industry in the years to come, and many have argued that this is the most important rule under consideration by the CFPB at present, CUNA has noted.

Other items that are scheduled to be finalized by Jan. 21 include:

  • Loan originator compensation regulations;
  • Home Owner's Equity Protection Act regulations;
  • Mortgage servicing rulemakings that impact Regulation Z and Regulation X; and
  • Higher-risk mortgage appraisal regulations.
New escrow disclosure and waiver requirements are also expected to be finalized by the CFPB early this year. A final version of integrated Truth in Lending Act/Real Estate Settlement and Procedures Act disclosures, and accompanying rules, should be finalized by mid-2013, CUNA adds.

CUNA continues to meet with the CFPB and urge improvements in all of these proposals and will keep credit unions posted as the new rules are issued, CUNA Deputy General Counsel Mary Dunn said.

For more on these CFPB changes, use the resource link. A more comprehensive look at what regulatory changes credit unions can look out for in 2013 will be released in the coming days.

Inside Washington (01/02/2013)

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  • WASHINGTON (1/2/13)--The Senate Sunday voted to confirm Carol Galante as assistant secretary of Housing and Urban Development. In her new position, Galante will head the Federal Housing Administration. The vote was 69-24. Galante previously held the assistant secretary position in an acting capacity. Prior to that, she served as the deputy assistant secretary for multifamily housing programs, a post to which she was appointed by President Barack Obama in March 2009 …