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CUNA keeps MBL pressure on as Congress prepares for years end

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WASHINGTON (12/15/11)—The Credit Union National Association (CUNA) has continued to aggressively advocate for increased credit union member business lending (MBL) authority as 2011 nears its end, with CUNA President/CEO Bill Cheney saying Congress should consider using all "available and sensible remedies," including an MBL cap increase, to increase accessibility of funding to small businesses.

Cheney promoted an MBL cap lift in a letter that was sent to Senate securities subcommittee chairman Jack Reed (D-R.I.) and ranking member Michael Crapo (R-Idaho) ahead of a Wednesday hearing on investor risk in capital raising. Cheney said "credit unions support efforts to help small businesses, and want to be part of the solution as well."

Cheney added that raising the MBL cap, if compared with other remedies to address small business credit shortage, would "come considerably ahead" of other suggested solutions, including more lenient registration rules for banks with the Securities and Exchange Commission and rules regarding "crowdfunding," a method of raising funds through pools of investors.

"Credit unions would be significantly troubled if any of the bills related to shareholder thresholds or crowdfunding moved through the legislative process in the absence of similar movement of S. 509," pending legislation raise the cap on credit union business lending to 27.5 percent (from the current cap of 12.5 percent), Cheney wrote. He added: "This is a key issue for credit unions."

CUNA has estimated that increasing the current 12.25% of assets MBL cap to 27.5% of a credit union's total assets would have a number of beneficial effects on the ailing economy, including infusing $13 billion in new credit for small businesses and adding 140,000 new jobs within the first year of enactment--all at no cost to the American taxpayer.

Two MBL cap lift bills, Sen. Mark Udall's S. 509 and Rep. Ed Royce's (R-Calif.) H.R. 1418, remain active in Congress. S. 509 has 21 cosponsors, and H.R. 1418 has 108 cosponsors.

CUNA has encouraged credit union advocates nationwide to discuss MBLs and other credit union issues with their legislators as they return to their home districts for the holidays. Congress is scheduled to end the 2011 legislative year on Dec. 16, but work could continue into next week.

CUNA WOCCU inform foreign CU reps on advocacy efforts

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WASHINGTON (12/15/11)—The Credit Union National Association (CUNA) and the World Council of Credit Unions (WOCCU) teamed up this week to advise credit union representatives from nine countries on best practices for making sure the credit union point of view is heard by their legislators and government officials.

Through the two-day workshop at Credit Union House on Capitol Hill,  CUNA and WOCCU addressed more than 30 credit union representatives from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Paraguay, Peru and Puerto Rico.

Click to view larger image CUNA President/CEO Bill Cheney, right, discusses credit union advocacy with Mexico's Caja Popular de Ahorros Yanga CEO Margarito Saavedra, left, WOCCU President/CEO Brian Branch, left center, and and Fernando Rivera, project director for FEDECACES, El Salvador's credit union trade group, at the joint WOCCU/CUNA advocacy training workshop. (WOCCU PHOTO) 

"Each country has a different political system, but the basic principles of advocacy are universal," noted CUNA President/CEO Bill Cheney, adding that the workshop gave examples of how they are applied in the United States and sparked discussions on how they may be applicable in Latin America.

WOCCU President/CEO Brian Branch said, "Today more than ever, we all need to strengthen our advocacy programs to address the increasing complexity of regulations and the increasing compliance burden. CUNA has been recognized many times over the years as one of the most effective advocacy organizations in the U.S. We are privileged that CUNA is sharing its expertise with other countries."

During the session, CUNA Senior Vice President of Legislative Affairs Ryan Donovan said, overall, that lobbying efforts should be unified, clear and credible, and accompanied by an understanding of both allies and opponents to credit union efforts. And CUNA Senior Vice President of Political Affairs Richard Gose highlighted the added impact that grassroots work can have on credit union advocacy, saying an educated credit union member base is important to communicating directly with legislators and holding them accountable for the decisions they make.

CFPB seeks comment on mortgage form design

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WASHINGTON (12/15/11)--The Consumer Financial Protection Bureau (CFPB) this week continued its work on mortgage closing forms, releasing two different transaction/closing-cost disclosures for public comment.

One form is similar to the existing Real Estate Settlement Procedures Act (RESPA) HUD-1 Settlement statement that homebuyers receive when they close a mortgage loan, the CFPB said. The second form is based on a CFPB prototype for mortgage disclosures that are provided when homebuyers first apply for a mortgage loan. Both of the forms present the same information; it is only the format that is different.

The CFPB is asking for any improvements that could be made to either form, and has asked the public to comment on whether the forms present the needed information in a consumer-friendly format, whether consumers that use the sample forms are able to easily identify key loan terms and closing costs, and whether all needed information is provided in the sample form.

The CFPB is working on a mortgage disclosure form project to combine the federal Truth in Lending disclosures and RESPA HUD-1 Settlement statement into a single document. The CFPB has said the goal of the revisions is "to provide information in a clear and simple way that consumers will find easier to use and understand and that industry will find less burdensome."

A final version of the mortgage disclosures will be released to the public between now and February, the CFPB said.

The combined closing form is meant to accompany the CFPB's combined Truth in Lending Act/Real Estate Settlement Procedures Act (RESPA) document. The CFPB is also planning to develop new mortgage regulations once the mortgage disclosure form revision project is completed.

The CFPB said the mortgage reform efforts seek to reduce the paperwork burden faced during the mortgage process by 50%.

CUNA continues to be actively involved in roundtable discussions and other forums with CFPB personnel and others as the mortgage revision process moves forward. For the CFPB release, use the resource link.

NCUA looks at loan participations liquidity today

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ALEXANDRIA, Va. (12/15/11)--Loan participation issues and credit unions' access to liquidity will lead the agenda when the National Credit Union Administration (NCUA) holds its December monthly board meeting today.

NCUA Chairman Debbie Matz earlier this year said the agency would develop a new loan participation protection rule covering both originators and buyers to require originators to retain some of the original loan risk on their balance sheets, and require buyers to do more due diligence.

Regulatory Flexibility, the final version of a proposed NCUA corporate credit union proposal, the NCUA's strategic plan for the years 2011 through 2014, the 2012 Annual Performance Budget, the 2012 Budget for NCUA Guaranteed Note Securities Management and Oversight, and National Security Delegations of Authority are also on the agenda.

The NCUA will also respond to Virginia-based Henrico FCU's request to expand its community charter during the meeting, and the monthly insurance fund report will also be presented during the open portion of the board meeting.

For the full NCUA agenda, use the resource link.

Inside Washington (12/14/2011)

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  • WASHINGTON (12/15/11)--Lawmakers questioned Julie Williams, the Office of the Comptroller of the Currency's (OCC) deputy comptroller and chief counsel, about the relationship between the 14 largest mortgage servicers and the consultants that were hired to review their practices (American Banker Dec. 14). The consultants were supposed to be independent but lawmakers noted they were chosen by the servicers, casting doubt on the fairness of the OCC's process to homeowners. In April, federal bank regulators ordered the 14 largest servicers to complete a foreclosure review process, including identifying and assisting homeowners that were harmed by improper foreclosures and other illicit practices …
  • WASHINGTON (12/15/11)--House Republicans and Senate Democrats have proposed legislation that would raise the guarantee fees that banks pay Fannie Mae and Freddie Mac to cover the risk of defaulting mortgages. The fee increases could help bring private investors back into the mortgage market, according to industry observers (American Banker Dec. 14). Private investors cannot compete with the government's low prices for mortgage-default guarantees, the Banker said. But if guarantee fees were raised significantly, private investors may be enticed to buy loans from lenders. Large banks have long paid volume discounts to Fannie and Freddie, a sore point with community banks and smaller lenders that pay higher fees, according to the Banker
  • WASHINGTON (12/15/11)--New Jersey credit union advocates met with three of the state's U.S. House delegation during New Jersey at Credit Union House on Tuesday in Washington D.C. Participants heard from U.S. Reps. Frank LoBiondo (R), Scott Garrett (R) and Bill Pascrell (D). They also received political, legislative, and regulatory briefings from Credit Union National Association staff and insights from CUNA President/CEO Bill Cheney. "This was a special opportunity to showcase credit unions and talk about our latest political initiatives, namely the need to get the member business lending cap increased," New Jersey Credit Union League President/CEO Paul Gentile said. Gentile, left, speaks with Cheney …

Treasure State Kansas Corporate CUs merge

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ALEXANDRIA, Va. (12/15/11)--The National Credit Union Administration (NCUA) Wednesday approved a merger between Treasure State Corporate CU, of Helena, Mont., and Kansas Corporate CU, of Wichita, Kan. Kansas Corporate remains as the continuing corporate credit union.

The agency assured that both corporate credit unions are financially sound but sought the merger as a way to benefit from greater efficiencies and increased service volumes that the merger could bring without significant additional expense.  The merger is expected to be effective as of Jan. 1, 2012.

Treasure State is a $230 million state-chartered corporate serving 57 credit unions and provides a wide range of correspondent services. Kansas Corporate is a $315 million state-chartered corporate providing its 148 member credit unions access to correspondent services, investment solutions, liquidity solutions, and technology services.