WASHINGTON (10/31/13, UPDATED 12:50 p.m. ET)--From the anticipated range of corporate assessments, to a new stress testing proposal, National Credit Union Administration Chair Debbie Matz covers a wide spectrum of issues in the most recent edition of Inside Exchange with the Credit Union National Association's Paul Gentile.
This is Part I of a two-part "Inside Exchange" with the NCUA chair. One of the key issues covered in Part 1 is NCUA's approach with new regulations and its approach to regulating the evolving credit union system.
"We are reallocating resources to the credit unions where there's risk and those tend to be the larger credit unions. I don't see us decreasing our work force, but I see a reallocation.
"We will have more examiners focused on those credit unions and also more specialists that have expertise in capital markets and member business lending. But for the smaller credit unions they will probably have examiners in their shops for fewer hours because we're doing a reduced scope in smaller credit unions that don't have significant issues."
Matz is the only NCUA board member to serve two terms: her first back in 2002 and her most recent starting in 2009. She reflected on how NCUA has changed from her first term to today.
"The staff is so different. Eighty percent of our office directors and regional directors are in different positions…and 40% of our examiners have been with us less than five years. So the good news is we have a lot of fresh faces and fresh eyes and new perspectives," she said.
In terms of the NCUA's new proposal on stress testing for credit unions with $10 billion or more in assets, Matz said, "We are reallocating resources to the credit unions where there's risk and those tend to be the larger."
Other topics addressed in the Part I interview include stress testing, how NCUA interacts with the CFPB, examiner hours and focus, corporate assessments, NCUA's use of credit union feedback and more. Part II will concentrate on the 2014 NCUA Budget, the agency's CUSO proposal, Matz's outlook for regulatory relief and more.
WASHINGTON (10/31/13)--Federal legislation that would allow credit unions and other financial institutions nationwide to offer prize-linked savings accounts (PLS) was introduced in the U.S. House and Senate this week.
A 1960s law that bans banks from operating lotteries unintentionally precludes banks and thrifts from offering PLS products, the legislators explained. Some states have laws to allow PLS products, but federal law limits PLS accounts.
Sens. Jerry Moran (R-Kan.) and Sherrod Brown (D-Ohio) introduced the Senate bill, which the legislators said would promote savings by creating a narrow exemption for PLS products while maintaining the ban on federally-insured financial institutions from operating lotteries. By removing federal barriers to PLS products, the American Savings Promotion Act "clears the way for states to enable all interested financial institutions in their jurisdiction to offer PLS products," the lawmakers said.
Similar legislation was introduced Tuesday by Reps. Derek Kilmer (D-Wash.) and Tom Cotton (R-Ark.).
"At a time when the annual savings rate in the United States is just 4.1%, PLS accounts would incentivize personal savings by offering participants chances to win prizes based on savings account deposit activity while never putting their savings at risk," Moran said. These accounts, he added, "are proven to increase savings-rates, which empower individuals to better endure financial strain and climb the economic ladder."
Save to Win PLS accounts were created by the Michigan Credit Union League in 2009. For every $25 deposited, account holders earn entries into monthly and annual cash prize drawings. All funds deposited into the accounts, including any interest earnings, belong to the account holders.
The program has appealed to unbanked and under-banked consumers who were not previously inclined to save money. Through these products, credit union members and others can receive entries into a cash prize sweepstakes for depositing a certain amount of money into their savings accounts. Maryland, Michigan, North Carolina and Washington are among the states that allow credit unions and other institutions to offer PLS products.
ALEXANDRIA, Va. (10/31/13)--Supervisory activities will be the lone item on the agenda when the National Credit Union Administration holds a closed board meeting this Friday.
The closed board meeting is scheduled to begin at 1:30 p.m. (ET). The meeting will be held at the agency's Alexandria, Va. headquarters.
For more on the meeting, use the resource link.
WASHINGTON (10/31/13)--The Credit Union National Association and Coopera joined forces Wednesday to provide tips on how to engage Spanish-speaking credit union members in CUNA's ongoing credit union tax status advocacy efforts.
CUNA and Coopera have worked to translate some common credit union terms into Spanish language equivalents, as seen in the above slide.
Coopera is a full-service Hispanic market solutions company that partners with credit unions across the country to reach and serve the Hispanic community as an opportunity for growth.
In the free joint webinar, CUNA President/CEO Bill Cheney underscored the importance of enlisting the help of Hispanic credit union members in the tax status fight.
Coopera CEO Miriam De Dios said education is essential in this tax fight, and noted some key terms that can help credit unions better communicate with Hispanic members. The webinar also highlighted new Spanish-language resources available as a part of the national "Don't Tax My Credit Union" campaign ("No Le Cobren Impuestos a Mi Credit Union," in Spanish).
CUNA's credit union tax advocacy initiative urges lawmakers to preserve the federal tax exemption credit unions receive as not-for-profit, member-owned cooperatives. Credit unions and their members are using CUNA and the state credit union leagues' resources, social media sites including Facebook, and micro-video site Vine, to tell their legislators, "Don't Tax My Credit Union!"
This pro-credit union message is also being shared through Twitter feeds, CUNA's Twitter handle @CUNAadvocacy and the hashtag, #DontTaxMyCU.
An archived version of the webinar should be posted on cuna.org this week.
WASHINGTON (10/31/13)--The Credit Union National Association sent a statement to the White House Wednesday on the nomination of Rep. Mel Watt (D-N.C.) to head the Federal House Finance Agency (FHFA).
CUNA, which has a longstanding policy not to endorse presidential nominees, said of Watt: "Rep. Mel Watt is a very astute and thoughtful legislator who throughout his career has listened to the concerns of credit unions as he analyzed and voted on legislation.
"We've always appreciated our relationship with Congressman Watt and look forward to working with him should he be confirmed as the next director of the Federal Housing Finance Agency."
CUNA also recognizes that it is important for an FHFA director to be confirmed, rather than serve without the approval of the Senate. The FHFA has been operating under acting Director Edward DeMarco since James Lockhart left the post of director in August 2009.
Watt needs 60 votes to be confirmed as FHFA leader, and to amass that number of yea votes must bypass what has been strong Republican opposition to his nomination. It is expected that the U.S. Senate could vote on Watt's nomination today.
WASHINGTON (10/31/13)--The Credit Union National Association supported some aspects of the U.S. Department of Housing and Urban Development's (HUD) proposed Federal Housing Administration Safe Harbor Qualified Mortgage (QM) Threshold definition, but also offered changes to clarify parts of the proposal, in a comment letter filed this week.
In the letter, CUNA Associate General Counsel Jared Ihrig said CUNA generally supports HUD's proposed QM definition. However, Ihrig said, the definition does not clearly state how lenders would combine the annual mortgage insurance premium (MIP) with 1.15% to calculate the proposed FHA Safe Harbor QM threshold. CUNA suggested the agency adopt a simpler approach that uses a single percentage point amount, while still taking the MIP into consideration. This would be similar to the Consumer Financial Protection Bureau's approach, Ihrig wrote.
The letter also addressed streamlined refinancings and debt-to-income ratios, among other items.
For the full CUNA comment letter, use the resource link.
HUD is required under the Dodd-Frank Act to issue its own QM rule, separate from the one issued earlier this year by the CFPB.
Once finalized, HUD's QM rule will replace the CFPB's QM definition for FHA loans or certain other HUD insured loans. HUD expects to finalize and have its QM rule become effective on Jan. 10, at the same time as the CFPB's QM rule takes effect.
ALEXANDRIA, Va. (10/31/13)--National Credit Union Administration Chief Economist John Worth examines the impact of the federal government shutdown and related events on interest rates, consumer confidence and labor markets in a new "Economic Update" video.
Worth addresses the recent decline in long-term interest rates. "While interest rates will remain relatively low while growth is weaker than expected, we think this will just be a delay in the ultimate re-adjustment of rates that credit unions need to be planning for," Worth says in the video.
The video is the latest in a series of YouTube videos to inform the public and credit unions about general economic and credit union specific developments.
The videos can also be viewed on the NCUA's YouTube page by using the resource link below.
WASHINGTON (10/31/13)--The U.S Small Business Administration (SBA) supported more than $29 billion in lending in fiscal 2013, its third-highest total, the agency reported this week.
The other record highs came in fiscal 2012 ($30.25 billion) and fiscal 2011 ($30.5 billion).
"Small businesses are the engine of our economy, and reaching our third highest year of SBA lending in FY 2013 demonstrates the strength and resiliency of America's 28 million small businesses as they continue to recover from the Great Recession and drive our economy forward," Acting SBA Administrator Jeanne Hulit said.
The SBA said the loans were made through its two main loan programs, 7(a) and 504.
Some 7(a) loan program fees were reduced on Oct. 1. (News Now, Sept. 27)
For the 2014 fiscal year, which began on that date, a yearly fee of 0.52% of the guaranteed portion of the outstanding balance of the loan will be assessed for 7(a) loans of $150,000 or more that are approved. The SBA previously charged a service fee of 0.55% of the outstanding balance of the guaranteed portion of the loan.
Yearly fees and guaranty fees will not be charged on 7(a) loans of $150,000 or less that are approved in that year.
Credit unions may participate in 7(a) loans, and the SBA-guaranteed portion of a 7(a) loan is not counted against a credit union's business lending (MBL) cap. There were 347 credit unions with over 8,100 SBA loans outstanding, totaling $921 million in funds, at the end of 2012.