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Cheney Hails CU Support For Federal Workers

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WASHINGTON (10/17/13)--Federal workers were expected back to work today after the U.S. House and Senate Wednesday moved toward a solution to the weeks-old spending standoff that led to a government shutdown--and the suspension of many federal workers' job responsibilities, as well as their paychecks.

Credit Union National Association President/CEO Bill Cheney took the opportunity to commend credit unions for their extensive work to help their members in need. "Over the last few weeks, we have heard so many fantastic reports of credit unions stepping up to help their members affected by the government shut down. 

"Always in hard times such as these recent weeks, credit unions show how the credit union philosophy of 'People Helping People' deeply benefits their communities."

The budget bill, which was approved by the Senate late Wednesday and was adopted 285-144 by the House, will fund the government through Jan. 15 and increase the debt ceiling through Feb. 7, allowing the U.S. Treasury to continue to borrow funds to pay the nation's outstanding bills. It requires additional income verification measures under the Affordable Care and Patient Protection Act to ensure that those receiving financial assistance to purchase health insurance are qualified.

The budget agreement also requires congressional leaders to name conferees to a budget conference committee that would issue recommendations by Dec. 13.

Federal workers are expected to receive back pay under the terms of the deal. President Obama signed the bill shortly after midnight.

During the shutdown, credit unions supported affected members by offering zero-percent loans, penalty-free term share withdrawals, one- to three-month deferment of loan payments, and fee waivers on early withdrawals on share certificates.

CUNA this week detailed some of these efforts in a letter to U.S. Rep. Maxine Waters (D-Calif.). Waters, the ranking member on the House Financial Services Committee, requested details from CUNA. CUNA's Cheney in the letter noted that "the credit union mission is to promote thrift and provide access to credit for provident purposes to members...As member-owned, not-for-profit cooperatives, credit unions embody a 'people helping people' philosophy. As a result, when credit union members face hardship, they have confidence that their credit union will stand with them and provide assistance. It is simply what we do," he added.

See resource links for extensive stories of credit unions' efforts.

NCUA Employees Robust In Food Bank Giving

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ALEXANDRIA, Va. (10/17/13)--National Credit Union Administration employees increased their donations to an area food bank by 961% this year. They gave more than 22,000 pounds of food to the Capital Area Food Bank through the Feds Feed Families program; it is expected to help more than 18,000 residents of the Washington metropolitan area.
NCUA employees of all levels participated in the food drive and to achieve the record-breaking results, several NCUA office directors offered to match staff contributions by as much as four to one.

"The staff at NCUA really stepped up, and this year's charity drive was nothing short of amazing," NCUA Chair Debbie Matz said in a release. "In a time when food banks are reporting historically high levels of requests for help, NCUA staff responded to the need energetically and creatively. "
Since the Feds Feed Families annual food drive began in 2009, federal workers have donated and collected 15.2 million pounds of food and other non-perishable items to support families across the United States. More than 85% of federal workers live and work outside the Washington D.C. area.

CUNA Preps CUs For Oct. 28 Remittance Rule Reckoning

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WASHINGTON (10/17/13)--As the Oct. 28 effective date for new remittance transfer regulations approaches, the Credit Union National Association is reminding credit unions of how the coming regulatory changes could impact their daily business, and how they can prepare for the changes.

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

In a recent CUNA CompBlog post, Valerie Moss, senior director of compliance analysis, noted that two types of credit unions have reached out to CUNA with questions regarding the rule: Credit unions that provide remittance transfers "in the normal course of business" and are working on implementation issues, and credit unions that only provide international money transfers occasionally as an accommodation to members.

Both groups, Moss wrote, have one thing in common: They need to determine what is and is not a remittance transfer under subpart B of Regulation E--the electronic funds transfer rule.

Credit unions that provide remittance transfers in the "normal course of business" will be considered "remittance transfer providers," and will need to comply with the remittance rule requirements.

Credit unions will not be considered remittance transfer providers under the rule if:
  • They provided 100 or fewer remittance transfers in the previous calendar year; and
  • If they provide 100 or fewer remittance transfers in the current calendar year.
Credit unions that qualify for this safe harbor are exempt from the rule, Moss wrote.

When tallying the 100, credit unions must count all the various types of remittance transfers covered by the rule together. However, transactions that do not count toward this 100 transfer total include:
  • Domestic wire/ACH transactions;
  • Transfers where the credit union is the recipient institution of the wire/ACH;
  • Debit card purchases from a merchant located in another country;
  • International transfers sent by businesses;
  • Prepaid cards purchased in the U.S. that are not delivered to a recipient abroad; and
  • Online bill payments to recipients located in another country where the agreement states that payments will be made solely by check, draft or similar instrument.
CompBlog is planning more posts on the remittance regulation as the Oct. 28 effective date approaches.

Earlier this year, CUNA released a survey identifying credit unions' top concerns with the CFPB remittance rule.

CUNA's Center for Professional Development has also extended availability for its archived webinars on remittances until Jan. 31.

For more of this CUNA CompBlog post, the CUNA survey and the archived CPD webinars, use the resource links.

CFPB: Loan Mods, Payments Challenge Private Student Loan Holders

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WASHINGTON (10/17/13)--Payment processing and loan modification issues continue to be the most widely reported problems with private student loans, the Consumer Financial Protection Bureau's Student Loan Ombudsman noted in its annual report released Wednesday.

The report examines more than 3,800 private student loan complaints received by the CFPB between Oct. 1, 2012 and Sept. 30 of this year. Complaints from consumers seeking a loan modification comprised just under half of the student loan complaints received during the reporting period, the CFPB said.

The CFPB report said student loan refinancing options can be hard to find. It said that while many student loan borrowers attempt to pay off their loans early to reduce the total amount of interest owed, such attempts can leave consumers confused. According to the CFPB, sometimes payments in excess of normal monthly amounts are applied to all loans held by the borrower, not just the highest-interest loan under their name.

The ombudsman also reported complaints that lenders, in some cases, took partial payments intended for a single loan and distributed it equally to all a multiple loan holder's loans. That practice can result in additional late fees for the borrower, "and it can exacerbate the negative credit impact of a single late payment," the CFPB wrote.

Lost paperwork, processing errors and other issues have also cropped up when loans are transferred between multiple servicers, the report said. The CFPB released a consumer advisory to help borrowers deal with these and other issues. The advisory includes sample instructions that will help consumers ensure that any extra payments made on their student loans are applied toward the highest-rate loan they have taken out. For the CFPB report and the consumer advisory, use the resource link.

The Credit Union National Association has met with CFPB officials to underscore that credit unions could do even more to help debt-saddled grads if the maximum credit union student loan maturity of 15 years was increased. Also, this summer CUNA formed a student loan working group to explore current issues related to credit unions' offering private student loans to members. The group is focused on developing best practices for credit union student loans and monitoring related regulatory activity at the CFPB and the National Credit Union Administration.