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Periodic reviews of NCUA LICU policy beneficial CUNA

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WASHINGTON (11/27/12)--The National Credit Union Administration (NCUA) should revisit its Low Income Credit Union (LICU) designation process in 12 months' time and hold periodic reviews of its LICU policy thereafter, the Credit Union National Association (CUNA) recommended in a recent comment letter.

Overall, CUNA Deputy General Counsel Mary Dunn wrote that CUNA strongly supports the agency's proposal to extend the amount of time credit unions have to accept LICU designations to 90 days.

"There are many benefits associated with the low-income credit union designation, and CUNA wants to ensure all eligible credit unions that want to have the designation will be able to receive it," Dunn said.

At last month's open board meeting, the NCUA extended the LICU designation approval deadline by 60 days, saying the original 30-day response period was creating an obstacle for some credit unions to accepting the designation. NCUA Chairman Debbie Matz in an October release said credit unions should have sufficient time to properly assess whether to accept their offered LICU designations, and to complete their own internal approval processes, and the CUNA comment letter agreed with this agency assessment.

The LICU deadline extension proposal would also make minor technical amendments to NCUA's insurance regulation. The changes would allow the NCUA's Office of Consumer Protection, not regional directors, to designate federal credit unions as LICUs. (See related Oct. 19 News Now item: LICU-designation response time extended)

In the comment letter, Dunn said CUNA agrees with the NCUA's intention to notify federal credit unions of their low-income eligibility on a periodic basis. There should be additional opportunities to accept LICU designations in the future if a given federal credit union "does not or is not able to respond to a particular NCUA notification," Dunn said.

"In addition, NCUA should further clarify the process for the designation of low income credit unions that are state chartered, and work with state regulators to ensure the process works as well for state-chartered credit unions as it does for federally chartered credit unions," the letter added.

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

Thrivent FCU OKd to acquire banks assetsliabilities

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ALEXANDRIA, Va. (11/27/12)--Thrivent FCU was announced as the fourth newly chartered credit union of 2012 on Monday, and is the second bank-to-credit union charter conversion in U.S. history.

The National Credit Union Administration (NCUA) in a release said the new credit union on Dec. 1 will take on $500 million in assets, and certain liabilities, formerly held by Thrivent Financial Bank. The acquisition is the result of a bank-to-credit union conversion approved by the NCUA, the Federal Deposit Insurance Corporation, the Federal Reserve and the Office of the Comptroller of the Currency.

Thrivent Financial Bank is a subsidiary of Thrivent Financial for Lutherans, the fourth largest privately held company in Minnesota.

Thrivent in a separate release said all loan and deposit customer accounts held at the bank, including individual retirement accounts not serviced by Thrivent Financial Bank's Trust & Investment Services business, will be transferred to the new credit union. Existing trust accounts, investment management accounts and those individual retirement accounts currently serviced by Thrivent Financial Bank's Trust & Investment Services business will continue to be serviced and supported at Thrivent Financial Bank, under a new name, "Thrivent Trust Company," the release added.

The new credit union will become the largest faith-based credit union in the United States. Thrivent FCU will take on 47,000 clients from the bank, and has a potential membership of 2.5 million members nationwide, according to the agency. It will serve members from two branches located in Minneapolis, Minn. and Appleton, Wisc. Online services and a call center will also be made available to members.

NCUA Chairman Debbie Matz in a release said "it is indeed noteworthy that the Thrivent management team recognizes the many benefits of the federal credit union charter." Matz said the new credit union "is well-positioned to achieve success," and congratulated "everyone who worked to make this conversion possible."

For the full NCUA release, use the resource link.

Credit unions are not strangers to Thrivent Financial for Lutherans, which was the result of a merger in 2001-2002 of the Aid Association for Lutherans and Lutheran Brotherhood. The two organizations had a trust bank, three credit unions and a community bank in the Twin Cities. At that time it picked the thrift charter, which provided flexibility to continue to offer all the products and services of all the banks and credit unions.

Todd Sipe, who will serve as president of the new credit union, said on Monday that Thrivent FCU "is a logical fit with Thrivent Financial for Lutherans' history of aligning faith and finances." The credit union "will be able to offer a unique combination of financial expertise, competitive products and educational services, and shared values with our members. Our purpose will be to strengthen communities by helping members be wise with money so they can support the people and causes they care about," Sipe added.

Sipe earlier this year said the bank researched the needs and preferences of its members and decided the credit union model was the best model. Members preferred to become a member-owned not-for-profit organization where profits are returned in the form of better rates and fees, he said. "The credit union model is a great model in today's environment… clearly credit unions do enjoy a trusted relationship, so it reinforces the relationship we already have with our clients," Sipe added.

CUNA gathers 500 CUs small biz reps to press for MBL passage

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WASHINGTON (11/27/12)--More than 500 credit union and small business supporters, representing nearly every state, will blanket Washington, D.C. today and Wednesday to urge legislators to approve U.S. House and Senate bills that would increase the credit union member business lending (MBL) cap as part of a Credit Union National Association (CUNA)-organized National Hike the Hill.

Sen. Mark Udall (D-Colo.), lead sponsor of Senate MBL legislation, is scheduled to welcome the credit union and small business groups to Washington at a Hike the Hill reception this evening. Sen. Sheldon Whitehouse (D-R.I.), Rep. Brad Sherman (D-Calif.), Rep. Steve Stivers (R-Ohio), Rep. Renee Elmers (R-N.C.), Suzanne Bonamici (D-Ore.) and other legislators are also expected to attend the reception.

The MBL advocates will meet with their respective members of Congress on Wednesday. The focus of these visits will be bills that would increase credit unions' current 12.25%-of-assets MBL cap to 27.5% of assets, S. 2231 and H.R. 1418. Both of those bills, if enacted, would help credit unions lend an additional $13 billion to small businesses. This money, which would be made available at no expense to taxpayers, would in turn help small businesses create over 140,000 new jobs in the first year after enactment.

"Unlike banks, credit unions do not need taxpayer assistance to encourage them to do more business lending; credit unions only need authority from Congress," CUNA President/CEO Bill Cheney said on Monday.

A vote on MBL legislation is expected to be held before Congress adjourns for the year. The target adjournment date for this session of congress is Dec. 21.

S. 2231 has 21 cosponsors and H.R. 1418  has 143 cosponsors.

Support for both MBL bills has been strong, and this week's Hike the Hill is the third time that CUNA and small business advocates have joined forces to fight for an MBL cap increase. Small business advocates and owners most recently joined CUNA and credit unions to talk MBLs with members of Congress and their staff members at a September Capitol Hill event.

Cheney last month called on credit unions to ratchet up their MBL efforts to an even higher level. The CUNA CEO in recent weeks has encouraged leagues, credit union and small business partners to make as many congressional contacts as possible, whether they take on the form of in-person meetings, phone calls or emails. "We can do this. The time is now. Speak out. Let Congress know that credit unions are ready, willing and able to give small business, and our economy, the boost it needs," Cheney said.

For more on how best to contact your elected representatives and urge them to support MBL bills, use the resource link.

Inside Washington (11/26/2012)

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  • WASHINGTON (11/27/12)--U.S. Securities and Exchange Commission (SEC) Chairman Mary Schapiro will end her nearly four-year tenure at the top of the commission on Dec. 14, the agency said on Monday. SEC Commissioner Elisse Walter will take Shapiro's place, the White House announced. The New York Times reported that Walter may not serve her full term, adding that U.S. Treasury official Mary Miller and former Citigroup and Bank of America executive Sallie Krawcheck may be considered for the top SEC post …
  • WASHINGTON (11/27/12)--The Department of Justice (DOJ) last week claimed Texas' $285 million-asset State National Bank of Big Spring and assorted allies lacked the standing needed to challenge the legality of the Consumer Financial Protection Bureau (CFPB). (American Banker Nov. 21) Oklahoma, South Carolina and Michigan state attorneys general in September joined the bank's lawsuit, which claims that CFPB Director Richard Cordray was illegally appointed to lead that agency, and states that the CFPB itself is unconstitutional. The lawsuit also named the U.S. Treasury and other agencies and directors as defendants, arguing that elements of Dodd-Frank that give federal authorities the ability to seize and wind-down financial institutions are unconstitutional. The DOJ has noted that the bank must establish that it has been harmed for its legal challenge to have standing. While the bank has said pending regulations would harm its business prospects, the DOJ noted that none of these regulatory actions have actually occurred, and the bank's fear of future actions is not enough to support a court case …
  • WASHINGTON (11/27/12)--While the Senate Banking Committee has not released a formal agenda for next year's session of the U.S. Congress, committee spokesman Sean Oblack said Dodd-Frank oversight, mortgage finance reform, expiring authorizations and consideration of key Presidential nominees will likely be on the docket. (American Banker Nov. 25) However, Oblack noted, an official agenda will have to wait until committee Chairman Tim Johnson (D-S.D.) has had time to consult with new committee members and the committee's new ranking member. Congressional observers said legislators may feel more able to address issues within Dodd-Frank following the election. Republicans may also be more apt to focus on how the Dodd-Frank can be fixed, rather than aiming for a full repeal of the bill …
  • WASHINGTON (11/27/12)--The Mortgage Forgiveness Debt Relief Act, which exempts borrowers from paying taxes on short sales, principal reductions and other forms of debt forgiveness, will expire at the end of 2012 if the U.S. Congress does not act soon. (American Banker Nov. 21) Housing advocates have warned that the Act is a crucial part of housing market recovery efforts. Several bills that would extend the tax provisions have been introduced, but none have been passed. However, legislation that would extend the Act could be added to provisions meant to address the looming fiscal cliff. If the Act wins short-term extension, observers said it may not last much longer than that. They noted that improving housing markets, and increasing distance from the recent economic crisis, would make the tools offered by the Act harder to support in the long-term …

Senate MBL vote postponed this week

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WASHINGTON (11/27/12)--Reflecting the fast and furious pace of change in the current, month-long, lame duck congressional session, U.S. Senate leadership announced its schedule for the week and now is expected to take up Budget Act points of order and a plan to move forward on the Defense Authorization bill.

Absent from this week's Senate line up is a vote on S. 2231, a bill to increase credit union member business lending (MBL) authority. As late as this morning, MBL bill supporters were told to anticipate a vote this week--perhaps as soon as Wednesday.

However, after consultation with several Senate offices, the Credit Union National Association (CUNA) now does not expect a vote on S. 2231 this week. However, a vote is considered likely during the lame duck session, which is currently targeted to end Dec. 21.

S. 2231 would increase the MBL cap to 27.5% of a well-capitalized, experienced credit union's assets, up from the current 12.25% limit. H.R. 1418 is the House version of that legislation.

"The situation is and will remain fluid until a vote is cast," said CUNA Senior Vice President of Legislative Affairs Ryan Donovan Monday.

He emphasized that CUNA's grassroots advocacy effort this week, to push for a favorable vote on S. 2231, is very well timed.

More than 500 credit union and small business representatives are expected to be on Capitol Hill Tuesday and Wednesday participating in the CUNA-sponsored "Hike the Hill" to highlight the ways in which the legislation will bolster small businesses and help the economy at no cost to American taxpayers. (See related story: 500 CUs, small biz press for MBL passage this week.)

NEW Senate MBL vote postponed this week

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WASHINGTON (11/26/12 UPDATED 3:45 p.m. ET)--Reflecting the fast and furious pace of change in the current, month-long, lame duck congressional session, U.S. Senate leadership announced its schedule for the week and now is expected to take up Budget Act points of order and a plan to move forward on the Defense Authorization bill.

Absent from this week's Senate line up is a vote on S. 2231, a bill to increase credit union member business lending (MBL) authority. As late as this morning, MBL bill supporters were told to anticipate a vote this week--perhaps as soon as Wednesday.

However, after consultation with several Senate offices, the Credit Union National Association (CUNA) now does not expect a vote on S. 2231 this week.  However, a vote is considered likely during the lame duck session, which is currently targeted to end Dec. 21.

S. 2231 would increase the MBL cap to 27.5% of a well-capitalized, experienced credit union's assets, up from the current 12.25% limit.  H.R. 1418 is the House version of that legislation.

"The situation is and will remain fluid until a vote is cast," said CUNA Senior Vice President of Legislative Affairs Ryan Donovan Monday.

He emphasized that CUNA's grassroots advocacy effort this week, to push for a favorable vote on S. 2231, is very well timed.

More than 500 credit union and small business representatives are expected to be on Capitol Hill Tuesday and Wednesday participating in the CUNA-sponsored "Hike the Hill" to highlight the ways in which the legislation will bolster small businesses and help the economy at no cost to American taxpayers.

Senate vote on MBL bill expected this week

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WASHINGTON (11/26/12 UPDATED 1:00 p.m. ET)--The Credit Union National Association (CUNA) Monday told its membership to expect a vote this week--probably within the next 48 hours--on a Senate bill that would lift the credit union member business lending cap to 27.5% of assets, up from the current 12.25%.

Earlier this year Senate leadership pledged to hold a vote on S. 2231, which was drafted by Sen. Mark Udall (D-Colo.) and has 21 co-sponsors in the Senate. Whether it is as a stand-alone bill or combined in a package of other legislative issues, the MBL cap needs 60 votes to pass the U.S. Senate.

"CUNA has been having high-level meetings in the Senate, as well as in the House, and we are encouraged by those meetings," said CUNA Senior Vice President of Legislative Affairs Ryan Donovan. "We continue to work with our champions in the Senate to get the MBL language included into the right package." The House version of legislation to increase the MBL cap is H.R. 1418.

More than 500 credit union and small business representatives are expected to be on Capitol Hill Tuesday and Wednesday (participating in a CUNA-sponsored "Hike the Hill" grassroots advocacy effort) to push for a favorable vote on S. 2231. The bill has the backing of the Obama administration.

Noting that the banks are flying in their representatives to meet with federal lawmakers, CUNA EVP of Governmental Affairs John Magill noted that they will be in Washington, D.C. to fight the credit union effort, as well as to push their own agenda.

"The banks' opposition is not surprising but it is disappointing especially given their treatment of small businesses, which have been struggling to obtain bank credit the last five years," said CUNA EVP John Magill.

"This bill helps small businesses and it helps the economy at no cost to the taxpayer. We don't need the banks' blessing on this.  They don't control the U.S. Congress," Magill said.

Magill underscored, however, that there is always a good deal of uncertainty in any post-election, lame duck session of Congress and that schedules can change, for better or worse, at a moment's notice.