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Inside Washington (11/09/2012)

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  • WASHINGTON (11/13/12)--Increasing scrutiny from regulators on loss-reserves could place banks under pressure from certified public accountants (CPAs). Regulators have warned banks they don't want them releasing their reserves too quickly (American Banker Nov. 9). Banks, in turn, have changed the way they calculate reserves, either by adjusting the impact of historical losses or by closer inspection of projections. Those new methods could affect the bottom line, prompting scrutiny from banks' accountants. CPAs will not approve audits if reserves do not accurately reflect financial performance, said David Seleski, the president and chief executive at Stonegate Bank in Fort Lauderdale, Fla. Banks could end up in the middle of a battle between regulators and CPAs, Seleski said ...
  • WASHINGTON (11/13/12)--The Financial Stability Oversight Council will meet today to discuss recommendations to revamp money-market mutual fund regulations. U.S. Treasury Secretary Timothy Geithner, who chairs the FSOC, has been pressed the Securities and Exchange Commission (SEC) to initiate reforms of the money-market fund industry (American Banker Nov. 9). In a letter to the oversight council he said reforms are essential to the stability of the U.S. financial system. SEC Chairman Mary Schapiro has introduced a reform proposal, but it has not been approved by the agency's board. Geithner asked the FSOC in September to issue two alternative reforms proposed by Schapiro and another alternative that would impose capital and enhanced liquidity standards …
  • WASHINGTON (11/13/12)--Rep. Judy Biggert's (R-Ill.) loss to former Democratic Rep. Bill Foster on Tuesday will open up a slot on the House Financial Services Committee. Biggert's loss was due in part to redistricting (American Banker Nov. 9). Biggert serves as chairman of the subcommittee on insurance, housing and community opportunity. She has been a critic of the Dodd-Frank reform law and the country's mortgage finance system, including Fannie Mae and Freddie Mac and the Federal Housing Administration. Biggert was also willing to work in a bipartisan manner and has industry, noted Edward Mills, a financial policy analyst at FBR Capital Markets and former Hill aide. An attorney, she had a private law practice specializing in real estate, estate planning and probate law before serving in Congress ...
  • WASHINGTON (11/13/12)--The Federal Deposit Insurance Corp. (FDIC) announced a new tool for examiners Thursday. The tool, called ePrep, will customize requests to fit each bank's specific structure (American Banker Nov. 9). The system was built with community banks in mind, Kristie Elmquist, the FDIC's Dallas regional director, said at a meeting of the FDIC's community bank advisory committee. The new pre-exam tool has been piloted in exams at 30 banks, and is slated for full release by early 2013. ePrep allows examiners seeking pre-exam information to specify the type of exam and the types of bylaws, executive committee minutes, loan and liquidity information, and other characteristics specific to the bank being examined …

Online media added to CUNA advocacy toolkit

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WASHINGTON (11/13/12)--Credit union-supported candidates saw great success in last week's elections, and advocacy for these candidates, in some cases, was provided by the Credit Union National Association's first forays into new media political advocacy.

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CUNA's Credit Union Legislative Action Council (CULAC) allocated portions of its independent expenditure (IE) budget toward "new media" campaigns for three U.S. House candidates: Dan Maffei (D-N.Y.), Chris Collins (R-N.Y.) and Iowa candidate Kristie Vilsack (D).

Maffei and Collins both defeated sitting House incumbents. Vilsack lost her House race.

CULAC's advocacy for these candidates took the form of demographically targeted online advertising on web-based media platforms such as social media site Facebook, online radio site Pandora, and banner or sidebar ads on various websites. The candidates also received search-based advertisement placement through Google's AdWords product.

The ads redirected users that clicked on them to a  CULAC-managed website or Facebook page, helping the users learn more about the candidate and their policy priorities. "The ads were targeted only to IP addresses within the given candidate's district, and with a high certainty to be seen by the targeted demographic based on factors like which websites the targeted voters regularly visit," CUNA Vice President of Political Affairs Trey Hawkins said.

"We know the ads were displayed hundreds of thousands of times, and clicked on thousands of times," he added. Hawkins noted that the pro-candidate Facebook pages were "liked" by hundreds of people in each district, including credit union members.

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"Overall, this was just a small portion of our overall budget for independent expenditures, but we thought it was another worthy avenue to educate voters, and in the case of the Facebook pages, mobilize and activate supporters for our candidates," Hawkins said. CULAC spent more than $1 million on IEs this election cycle.

CUNA supported 388 candidates for the House and Senate in Tuesday's election, and in 96% of those races the credit union-friendly candidates won. CULAC remains the most bipartisan political action committee (PAC) in's list of the top 20 PAC contributors for this election, with funding nearly evenly divided between the two major parties.

While last week's elections marked the end of a busy period for CUNA and CULAC, there is no rest for the weary, as credit union efforts have turned toward grassroots advocacy for member business lending cap increase legislation and other credit union priorities.

CUNA is hosting a late November Hike the Hill to make one final push for MBL passage in this session of Congress. CUNA President/CEO Bill Cheney is encouraging credit union supporters and small business owners to travel to Washington and let their voices be heard. (See related story: Time is now to take MBL action: CUNA Video)

NCUA joins N.J. league for Sandy relief

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NCUA Chairman Debbie Matz loads the agency's hurricane aid truck. (NCUA Photo)
NJCUL President/CEO Paul Gentile, left, and NCUA Adviser Buddy Gill unload a truck-full of donations at NJCUL headquarters. (NJCUL Photo)
ALEXANDRIA, Va (11/13/12)--New Jersey Credit Union League (NJCUL) President/CEO Paul Gentile last week thanked the National Credit Union Administration for its "extraordinary" hurricane relief efforts.

"We are so grateful to the agency. NCUA Chairman Debbie Matz very quickly reached out to us to extend help, and she and NCUA delivered," Gentile added.

National Credit Union Administration (NCUA) Adviser Buddy Gill late last week drove a 20-foot moving truck filled with clothing, blankets, pillows, and canned goods from NCUA offices in Alexandria, Va. to the NJCUL's office in Hightstown, N.J. The goods were donated by NCUA staff throughout the week.

"I couldn't believe how packed NCUA's truck was with clothing, water and dry goods. They did an amazing job. It took the League staff over an hour to unload because there was so much," Gentile said. He also offered a special thanks to Gill for his role in delivering the goods.

Rutgers FCU also donated clothing and food to the league.

The NCUA and Rutgers FCU donations will be made available to credit union employees, volunteers, members, and communities affected by Hurricane Sandy. New Jersey credit unions that wish to help with distribution of these goods can contact NJCUL.

CUs provide insight on member service education efforts CFPB

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WASHINGTON (11/13/12)--The insights gained from discussions with the Credit Union Advisory Council (CUAC) and the Consumer Advisory Board (CAB), which features two credit union representatives, were noted in a recent Consumer Financial Protection Bureau (CFPB) release.

The CFPB formed these advisory councils to gather industry input and discuss how the agency can work with financial institutions to improve the financial market for consumers. The groups meet throughout the year.

Member service and education efforts were top items discussed by credit unions during recent meetings of these two advisory groups, the CFPB said. "Credit unions' not-for-profit mission and dedication to financial empowerment and financial education sets credit unions apart as trusted and reliable leaders and partners in local communities," the agency added in a release.

The CFPB said its early October CUAC meeting featured a lively discussion about credit unions' role in leveling the playing field for consumers. CUAC members debated "whether their role as institutions is to provide cash-crunched consumers with viable and more cost-efficient alternatives to high-interest payday loans or to provide education and services designed to help their members become less reliant on short-term small-dollar loans," the CFPB said.

CUAC members during the meeting also expressed great interest in and support for the CFPB's financial education efforts, the agency said. The CFPB noted that member institutions of the CUAC and another group, the Community Bank Advisory Council (CBAC), have worked with local schools, community colleges, community organizations and churches to promote greater financial literacy.

The CUAC, CAB and CBAC all expressed concern over growing regulatory burdens, and emphasized that smaller financial institutions like community banks and credit unions can be greatly challenged by the presence of a new regulator, the CFPB said. All of these groups encouraged the CFPB to "make sure that the cost of complying with new regulations is not overly burdensome on small institutions," the agency added.

The CAB is comprised of 25 members with expertise in consumer protection, financial services, community development, fair lending, civil rights, and consumer financial products or services. Bill Bynum, CEO of Hope Enterprise Corp. and Hope Community CU, Jackson, Miss., is CAB vice president. Laura Castro de Cortes, vice president of alternative financial services for Centris FCU, Omaha, Neb., is also a CAB member.

The 15 members of the CUAC are:

  • Bernard Balsis, IEG FCU, Hawaii;
  • Rose Bartolomucci, Towpath CU, Ohio;
  • Gary Bell, Cooperative FCU, California;
  • John Buckley, Gerber FCU, Michigan;
  • Carla Decker, District Government Employees FCU, Washington, D.C.;
  • Ron Ehrenreich, Syracuse Cooperative FCU, New York;
  • Kevin Foster-Keddie, Washington State Employees CU, Washington;
  • Mitchell Klein, Police and Firemen FCU, Pennsylvania;
  • Lily Lo, Northeast Community FCU, California;
  • Maria Martinez, Border FCU, Texas;
  • Marcus Schaefer, Truliant FCU, North Carolina;
  • Camille Shillenn, Unified People's CU, Wyoming;
  • Helen Godfrey Smith, Shreveport FCU, Louisiana;
  • Gregg Stockdale, 1st Valley CU, California; and
  • David Wright, Services Center FCU, South Dakota.

Time is now to take MBL action CUNA Video

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WASHINGTON (11/13/12)--The Credit Union National Association (CUNA) is pushing hard for a vote on member business lending (MBL) cap legislation during the lame duck session of Congress, and CUNA President/CEO Bill Cheney in a video said he needs the help of credit unions and small business owners "to make this vote a reality."

MBL legislation made Sen. Majority Leader Harry Reid's (D-Nev.) list of 'to-do-items for this lame duck session of Congress, and Senate leadership has committed to a floor vote on MBL legislation. CUNA and credit union leagues are also urging credit unions to participate in a national Washington fly-in set for Nov. 27-28, during the heart of Congress' lame duck session, expressly to advocate for an MBL vote. Word surfaced last week that the banking trade associations are organizing a fly-in of their own in an attempt to counter credit union efforts--another reason CUNA is urging credit unions to respond to this call for action.

Cheney's new MBL video also features commentary from Senate MBL chief sponsor Sen. Mark Udall (D-Colo.) and clips from a recent Capitol Hill pro-MBL rally held by CUNA and pro-MBL coalition partners.

"Altogether, our actions stress the crucial role credit unions play in small business expansion and job growth. We have made a strong case; many in Congress support us," Cheney said.

CUNA and credit union leagues already have met with nearly every member of Congress to set the stage for an MBL vote, and members of the CUNA-organized coalition of 40 pro-small business groups are also actively making the case for more credit union business lending in their own meetings with lawmakers.

But the argument could still be made stronger, Cheney emphasized. "Every league, credit union and small business partner must contact their Senators and House members--no matter if you do or don't make business loans. We need as many contacts as possible: In-person meetings, phone calls, emails," he said. "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 added.

The lame duck session is scheduled to begin when members of Congress return to Washington today.

CUNA is prepared for a straight up-or-down vote on stand-alone MBL legislation, but CUNA is also eyeing "a number of good vehicles that MBLs could hitch a ride on," CUNA Executive Vice President John Magill said.
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