Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

Washington Archive

Washington

CUs small biz reps rally on Capitol Hill for MBL vote

 Permanent link
WASHINGTON (11/28/12)--Kicking off the Credit Union National Association's (CUNA) National Hike the Hill Tuesday, Sen. Mark Udall (D-Colo.) thanked credit union and small business supporters for coming to Washington, D.C. to urge lawmakers to vote for legislation to increase the credit union member business lending (MBL) limit.

Click for slide showCUNA President/CEO Bill Cheney launches the Nov. 27-28 National Hike the Hill event during which more than 500 credit union and small business representatives will blanket Capitol Hill to urge legislators to approve U.S. House and Senate bills that would increase the credit union member business lending (MBL) cap. CUNA Senior Vice President of Legislative Affairs Ryan Donovan listens to Cheney's left. (CUNA Photo)
Udall, lead sponsor of the Senate's MBL bill, said he appreciated the work being done to back his efforts to move forward his bicameral, bipartisan legislation that will "continue to help our economy grow and create jobs."

"Let's get this bill done!," Udall exclaimed.

Five hundred credit union and small business representatives, from nearly every state in the union, will work to do just that as they push for greater credit union member business lending authority in meetings with their respective legislators today.

Head U.S. House MBL cosponsor Ed Royce (R-Calif.) urged the credit union and small business advocates to remind members of Congress during their visits that "getting America back to work is not a credit union versus bank issue, it is not a Republican versus Democrat issue. It is an opportunity we have right now to get credit in the hands of small business and create 140,000 jobs out there, and do it without borrowing money from overseas.

"Thanks to you, we are closer than we have ever been. We'll all work together to see this thing through," Royce added.

In other brief remarks, credit union champion Rep. Brad Sherman (D-Calif.) said there is "nothing more important" than lending to small businesses that are in need of capital. Rep. Paul Tonko (D-N.Y.) praised credit unions for their excellent track record. "You invest in communities. You make things happen," Tonko said.

Rep. Suzanne Bonamici (D-Ore.), who's first act as a member of congress was signing on to support the House MBL legislation, called the bill "a great way to help small businesses," and Rep. John Larson (D-Conn.) said credit unions, in working for the MBL cap increase, are "pressing the concerns of everyday people in America."

Rep. Steve Stivers (R-Ohio), called the credit union MBL cap increase "a private sector solution that will create jobs," and Rep. Gerald Connolly (D-Va.) noted that when banks weren't willing to lend, credit unions were.

House Financial Services Committee Chairman Spencer Bachus (R-Ala.), Rep. Earl Blumenauer (D-Ore.) and Rep. Tom Reed (R-N.Y.) were also among the lawmakers that attended the launch of the Hike the Hill event meant to increase support for U.S. House and Senate bills that would increase the MBL cap from the current 12.25%-of-assets lending limit to 27.5% of assets.

Senate MBL legislation (S. 2231) could be considered any day during the lame duck session, and CUNA President/CEO Bill Cheney said the vote could come in any number of formats: as a stand-alone bill, as part of a package with other legislation--or as part of a larger, must-pass piece of legislation.

Cheney stressed that how the MBL legislation gets passed does not matter. The point, he said, is making sure it passes.

"This is the best chance that we have had in the past ten years to get this bill passed, once and for all. We've won the policy argument, we've shown our commitment, we've built a strong coalition between credit unions and small businesses. Only the banks oppose us--and we know why. Let's get past the banks and their tired arguments. Let's move forward with our conviction that we can and will win on this bill--for our members, for our communities--and for country. It's the right thing to do," he said.

If enacted, the MBL bills would help credit unions inject $13 billion in new funds into the economy. 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.

The National Hike the Hill caps a strong year of support for the pro-business MBL cap increase legislation, which began with hill hikes before and during the 2012 CUNA Governmental Affairs Conference and continued in Washington and home districts throughout the year.

Small business owners from across the country also joined CUNA and credit unions for a spring Capitol Hill small business hike. Business owners and advocates later joined CUNA and credit unions to talk MBLs with members of Congress and their staff members at a September Capitol Hill event, and CUNA staff also held hundreds of meetings with congressional staff during the recently completed lame duck session.

Inside Washington (11/27/2012)

 Permanent link
  • NEW YORK (11/28/12)--Zurich-based UBS AG asked the U.S. Court of Appeals in Manhattan Monday to overturn a ruling that allows the Federal Housing Finance Agency (FHFA) to continue its suit against UBS and a dozen other banks over $6.4 million in losses from mortgage bonds sold to Fannie Mae and Freddie Mac. UBS argued that FHFA, which regulates the two mortgage-finance companies, failed to file the case within the three-year time period allowed under the statute of repose (Bloomberg Businessweek.com and American Banker Nov. 26). The suit centers on whether the 2008 law that created FHFA also extended the time it can file the claims. UBS maintains the agency sat on its claim. The FHFA maintains that if it is subject to time barriers, it would be severely constrained in recovering money for Fannie and Freddie and ultimately taxpayers would pay. The UBS action is one of 16 against mortgage underwriters that are pending before the U.S. District Court. The appeal focuses on distinctions between statutes of limitation and statutes of repose, legislative intent and more. The court's ruling has the potential to determine whether any of FHFA's cases can proceed, said the Banker
  • WASHINGTON (11/28/12)--A new Internal Revenue Service (IRS) rule that will take effect Jan. 7 is considered by some a boon for mortgage technology. IRS will begin accepting electronic signatures--specifically electronically signed 4506 T and 4506-EZ documents--to verify income. The forms are a part of nearly every mortgage and loan modification and will have a major impact on paper use and time, said the American Banker (Nov. 26). The forms are requests for transcripts of tax returns, which help lenders determine a borrower's ability to repay a loan. The new rule isn't expected to promote development of a new technology, but will allow existing signature technology to be used in income verification process. Several companies already are vying for lenders' attention as electronic signature providers …

NCUA could do more to help rural CUs CUNA

 Permanent link
WASHINGTON (11/28/12)--The National Credit Union Administration's (NCUA) move to expand the definition of "rural district" for fields of membership is a positive step, but could go even further, the Credit Union National Association (CUNA) said in a comment letter.

The NCUA in late September approved a proposal that would provide more flexibility to federal credit unions serving rural areas by expanding the rural district definition to geographic areas with 200,000 or fewer inhabitants or less than 3% of a given state's population. In a comment letter released this week, CUNA Deputy General Counsel Mary Dunn said the NCUA proposal does not go far enough to provide meaningful relief to those credit unions that provide services to rural communities.

CUNA analysis has found that states such as Wyoming, South Dakota, North Dakota, Montana, Alaska, Maine, West Virginia, Idaho, Utah and Nevada will not see additional relief under the recent NCUA proposal because rural districts in those states constitute a higher percentage of the state's total population. The NCUA has indicated that only 13 states will be able to obtain more flexibility for rural districts if its proposed definition change is approved. Those states include the most populous in the nation, such as California, New York, Illinois, Florida, Ohio, and Pennsylvania. Moreover, the larger the state, the greater the relief would be afforded under the current proposal, CUNA added.

"While credit unions in the 13 states affected by NCUA's proposal deserve relief, credit unions in other states do as well," CUNA said.

Dunn said the agency has the legal authority to expand the definition of "rural district" beyond what it has proposed. She urged the NCUA to allow as much authority as legally permissible to federal credit unions to facilitate their presence in these areas of the country that are often are in serious need of financial institution services.

The CUNA comment letter suggested the NCUA allow credit unions that serve rural areas to determine for themselves the size of their fields of membership, governed by the credit union's resources to serve the area sufficiently and its ability to manage safety and soundness concerns.

CUNA urged the NCUA to consider this approach and to further analyze how the "rural district" definition could be further modified to ensure credit union service continues in rural areas of the country. In the meantime, CUNA suggested the NCUA could grant rural credit unions greater flexibility by amending its proposal to allow credit unions to serve districts with populations of up to 500,000 or 4% of the state's population, whichever is greater.

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

CFPB responds to CU CUNA concerns on remittances rule

 Permanent link
WASHINGTON (11/28/12)--The Consumer Financial Protection Bureau has announced its intentions to make some changes to its recent final rule on international money transfers--also known as remittances.

The list of expected changes reflects recommendations that the Credit Union National Association (CUNA) had made  during almost a dozen meetings with the bureau.

While the agency characterizes these changes as "limited," it is proposing amendments to the final rule that address issues CUNA's Remittances Working Group raised with CFPB Director Cordray on Oct. 18 and in subsequent meetings and during calls.

One will address what should happen if a consumer provides an incorrect account number for a transfer and how remittance providers must disclose certain third-party fees and foreign taxes.

The two other changes will address:

* The disclosure of certain foreign taxes and third-party fees; and

* The disclosure of sub-national, foreign taxes.

The CUNA recommendation not addressed is increasing the current 100 transfers per year exemption. CUNA has been urging that the CFPB significantly increase the exemption level so that many credit unions will not stop providing these services to their members because of the regulatory burdens.

While CUNA will continue working on the exemption issue, CUNA President/CEO Bill Cheney said this new proposal is a welcome development and one that CUNA plans to maximize in order to achieve meaningful relief for credit unions offering remittances services.

CUNA will be preparing a Comment Call on the proposal and coordinating its advocacy efforts with credit union leagues and key CUNA Committee and Council members.

The agency said Tuesday that it expects to extend the effective date of the remittance rule until 90 days after the adjustments are made final.

"We recognize that remittance providers may need time to make sure they're in compliance with the rule. We're expecting the new implementation date to be during spring 2013, and will keep you updated," the CFPB said.

Use the resource link to read the CFPB bulletin.

Progressive Policy Institute blasts Hill with MBL support

 Permanent link
WASHINGTON (11/28/12)--The Progressive Policy Institute (PPI), a Washington, D.C.-based think tank, is "blasting" Capitol Hill with a blog post that underscores PPI's position that increased member business lending authority for credit unions would "unleash billions to the smallest small businesses (50 employees or less) and allow new growth and hiring opportunities with no taxpayer assistance."

The PPI blog post notes that the recent three big-retail designated shopping days--"Black Friday," "Small Business Saturday," and "Cyber Monday"--all saw an increase in sales, which the blogger Jason Gold called "a good sign of consumer optimism heading into December."

That's good, Gold wrote, but added, "(A) big part of successfully growing their business is to have adequate access to financing. But 'tight credit' and 'small business' have been tied together by politicians and pundits as headwinds to economic recovery."

Gold drives his blog readers on Capitol Hill and elsewhere to a 2012 study by Brian Martin, "The Credit Gap: Easing the Squeeze on the Smallest Business." PPI said it was spotlighting Martin's paper to urge the U.S. Congress to pass bi-partisan legislation in the House (H.R. 1418) and Senate (S. 2231) that would raise the MBL cap to 27.5% of assets for well-capitalized and experienced credit unions.  The cap now sits at 12.25%.

The legislation could, PPI noted, provide up to $13 billion to small businesses in the first year after enactment alone and thereby create more than 140,000 new jobs at no cost to taxpayers.

See related News Now story: CUs, small biz reps rally on Capitol Hill for MBL vote.

NEW CFPB remittance rule to be delayed tweaked

 Permanent link
WASHINGTON (11/27/12 UPDATED 2 p.m. ET)--The Consumer Financial Protection Bureau has announced its intentions to make "certain limited adjustments" to its recent final rule on international money transfers--also known as remittances.

The list of expected changes reflects all but one adjustment that the Credit Union National Association (CUNA) had recommended during almost a dozen meetings with the bureau. 

In addition to the delay, there are three areas of proposed changes to the final rule. One will address what should happen if a consumer provides an incorrect account number for a transfer and how remittance providers must disclose certain third-party fees and foreign taxes.

The two other changes will address:

* The disclosure of certain foreign taxes and third-party fees; and

* The disclosure of sub-national, foreign taxes.

The CUNA recommendation not addressed is that of a safe harbor exemption. CUNA recommended that the CFPB provide a safe harbor from the final rule to exempt certain credit unions and other entities from the definition of a remittance transfer provider that provide  remittance transfers in the ordinary course of business if the entity provides a number of transfers below a safe harbor threshold.

The agency said Tuesday that it expects to extend the effective date of the remittance rule until 90 days after the adjustments are made final.

"We recognize that remittance providers may need time to make sure they're in compliance with the rule. We're expecting the new implementation date to be during spring 2013, and will keep you updated," the CFPB said.

Use the resource link to read the CFPB bulletin.