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Reg accountability bill would protect CUs CUNA

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WASHINGTON (10/26/11)--In its efforts to reduce the unnecessary regulatory burden of credit unions, the Credit Union National Association (CUNA) backed the Regulatory Accountability Act of 2011 (H.R. 3010) by submitting a statement for the record of Tuesday's House Judiciary Committee hearing.

H.R. 3010 would revise the Administrative Procedure Act to require agencies to consider the costs and benefits of new rules and other regulatory actions, and would require federal regulators to conduct public hearings for most rules estimated to have an aggregate impact on industry of over $1 billion. The legislation also sets new data quality standards for agency fact finding in the rulemaking process.

CUNA in its statement said the legislation "would give credit unions and others new tools and procedures that would help protect against arbitrary regulatory burdens" and "would significantly enhance the interaction between industry and federal administrative agencies."

Portions of the bill that add cost benefit analysis and information reporting requirements "would be far more effective than the closest existing parts of the Administrative Procedure Act, the Regulatory Flexibility Act and the Paperwork Reduction Act," CUNA added.

Rep. Lamar Smith (R-Tex.), the chief sponsor of the bill, in a statement called his legislation "common-sense reforms that have bipartisan support in both the House and the Senate." Reps. Howard Coble (R-N.C.), Collin Peterson (D-Minn.) are cosponsors of the bill, and joined Smith in introducing the bill, alongside Senators Rob Portman (R-Ohio) and Mark Pryor (D-Ark.).

Reducing regulatory burden for credit unions is a top CUNA priority, and CUNA has frequently called on the National Credit Union Administration, the Consumer Financial Protection Bureau, and other federal agencies to ease the working environment for credit unions.

For the full CUNA letter, use the resource link.

Financial advisory council sets Nov. 8 meeting

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WASHINGTON (10/26/11)--The President's Advisory Council on Financial Capability, created by executive order in 2010 to work to increase the financial literacy of the American public, will meet  on Nov. 8 at 10:30 a.m. (ET), the Federal Register reported.

The meeting will take place at U.S. Treasury headquarters in Washington. It is the fourth meeting of the council, which was founded in January 2010. The council is set to disband in late January if it is not extended by another executive order.

The council during the meeting will receive reports on the progress of its subcommittees on financial access, research and evaluation, partnerships, and youth, and will review subcommittee membership. The council will also hear from outside experts about youth financial capability and the use of technology in improving financial capability during the meeting, according to the Federal Register.

The council during the meeting will also review public comment on its recently released principles for recommendations.

Those principles are:

  • To provide recommendations that can be practically and quickly implemented and judged for their effectiveness in changing behavior;
  • To align with, consolidate and boost, rather than supplant, existing efforts of the private, for-profit, non-profit, and governmental sectors;
  • To remain consistent with the latest findings in behavioral economics;
  • To address issues impacting both the general population and smaller groups, including women, minorities, low and moderate income consumers, and the elderly; and
  • To leverage the use of technology to engage, inform, and impact behavior.

The advisory council has been tasked with advising President Barack Obama on ways to promote and enhance overall financial literacy, financial education efforts, and the general understanding of how to effectively use financial products. Defense Credit Union Council (DCUC) President/CEO Roland "Arty" Arteaga is one of the twelve members of the advisory council.

For more on the upcoming meeting and the council, use the resource links.

Reg accountability online gambling hearings lead week

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WASHINGTON (10/25/11)--With senators returning to their home districts until Oct. 31 and no financial services-related legislation on the House docket, credit unions will want to watch a trio of House hearings for potential action.

Two of these hearings will take place on Tuesday. The first of these hearings is scheduled for 10:15 a.m.(ET) before the House Judiciary Committee. That hearing will focus on the Regulatory Accountability Act of 2011 (H.R. 3010), legislation that would reform the process by which federal agencies analyze and formulate new regulations and guidance documents. Business owners and academics will testify during the hearing. 

Rep. Lamar Smith (R-Tex.), the chief sponsor of the bill, in a release said the bill would reform the current rulemaking process to lower the costs and improve the quality of new regulations and require federal agencies to hold formal hearings to test the assumptions and evidence on which the costliest new rules are based. A separate regulatory reduction bill has also been introduced in the Senate.

Reducing regulatory burden for credit unions is a top Credit Union National Association (CUNA) priority, and CUNA has frequently called on the National Credit Union Administration, the Consumer Financial Protection Bureau, and other federal agencies to ease the working environment for credit unions.

CUNA is also keeping an eye on Tuesday's House Energy and Commerce subcommittee hearing entitled:  "Internet Gaming:  Is there a Safe Bet?" Legislation that would allow the U.S. Treasury to license internet gambling operators and would permit approved operators to accept bets from U.S. citizens was offered in the House earlier this year by Rep. John Campbell (R-Calif.), with Rep. Barney Frank (D-Mass.) serving as its main co-sponsor.

The House bill would ease the compliance burdens imposed by the Unlawful Internet Gaming Enforcement Act (UIGEA) by supplying a list of approved Internet gambling providers that financial institutions could use to help determine what transactions to validate. While many transactions that are made with illegal gambling operators are blocked, the UIGEA regulations do result in a large number of false positives, creating issues for both credit union members and credit unions. Frank introduced identical legislation last year, and that bill gained House Financial Services Committee approval in July, but did not come up for further vote in the full House.

The House Financial Services financial institutions subcommittee has also scheduled a Thursday hearing on a U.S. Internal Revenue Service proposal that would require credit unions and other financial institutions to report on their Form 1042-S interest of $10 or more earned annually on deposit accounts held by nonresident aliens who are residents of any foreign country.

CUNA strongly opposes this regulation, and earlier this year asked the Internal Revenue Service to withdraw a proposed rule that would expand reporting requirements for interest paid to nonresident aliens, saying that the proposals costs to financial institutions and consumers will far outweigh any benefit to the IRS.

NCUA union employees will see pay freeze

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ALEXANDRIA, Va. (10/26/11)--The National Credit Union Administration's (NCUA) Wednesday announcement that it will institute a pay freeze for all NCUA employees in 2012, and will index future pay raises to the Office of Personnel Management's general schedule raise level, is "a step in the right direction," the Credit Union National Association (CUNA) said.

The agency will also freeze locality rates, and will provide yearly three percent contributions to an agency-established 401(k) plan and contribute to health, dental and vision premiums paid on federal plans. The terms were agreed to under a new three-year collective bargaining agreement, and the NCUA said its unionized employees agreed to the pay freeze as an offset to the increased employee benefits.

The agreement will bring the 950 unionized employees of the NCUA in line with a government-wide pay freeze that was put in place by an executive order earlier this year. The NCUA earlier this year applied the pay freeze to agency employees whose salary increases were not negotiated under existing union contracts.

The agreement is scheduled to be signed by NCUA Chairman Debbie Matz and National Treasury Employees Union (NTEU) President Colleen Kelley on Nov. 1.

CUNA will study this agreement to assess its impact.

The NCUA in July reduced its 2011 operating budget by $2 million after adjustments to the employee pay and benefit budget, administrative and contracting costs, travel, and other standard business expenses were made.

CUNA at that time supported the decision, but also noted that even with the reduction, the NCUAs 2011 budget of $223 million was still $23 million more than the agency spent in 2010.

Bill Cheney, CUNA president/CEO, encouraged the agency to "continue a close review of its operations and look for other potential areas where expenses can be cut without detracting from its mission of safety and soundness as it develops its 2012 budget."

Inside Washington (10/25/2011)

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  • WASHINGTON (10/26/11)--Colorado's state banking commissioner Fred Joseph said he disagreed with federal regulators' decision to shut down $1.38 billion-asset Community Banks of Colorado. The Federal Reserve Board Friday for the first time used special powers in shutting down the Colorado bank. The central bank appointed the Federal Deposit Insurance Corporation (FDIC) as receiver for the state-chartered bank. The Fed had never before used its authority to close a state-chartered bank, a role normally reserved for state-regulators. Joseph said he would have allowed the bank to sell branches and provided it with more time to solve its capitalization problems. Community Banks had agreed to sell 16 of its 40 branches to Boston-based NBH Holdings Corp. The FDIC opposed the sale. Joseph said. V. Gerard Comizio, a partner at Paul, Hastings, Janofsky & Walker, LLP, described the situation as an instance in which a state regulator sought to prevent a bank under his jurisdiction from failing …