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Washington Archive

Washington

Three congressmen back CU tax status in letter to House leaders

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WASHINGTON (12/21/11)--Three congressmen offered their support for credit union tax-exempt status in a letter sent to U.S. House of Representatives Speaker John Boehner (R-Ohio), U.S. House Majority Leader Eric Cantor (R-Va.) and U.S. Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, on Dec. 15.

During a meeting with credit union leaders at the Missouri Hike the Hill in Washington, D.C. in October, U.S. Rep. Todd Akin (R-Mo.) announced his willingness to write a letter in support of the credit union structure and tax status, according to the Missouri Credit Union Association (MCUA) (The Missouri Difference Dec. 20).  

"Credit unions continue to serve the initial goals intended by Congress when their tax-exempt status was granted," the letter states. "Regardless of size, credit unions remain cooperatives. They are operated by utilizing democratically controlled volunteer boards of directors who subsequently return their earnings to members of the credit union."

The letter is signed by Akin and U.S. Reps Daniel Lungren (R-Calif.) and Ron Paul (R-Texas).

"We thank Congressman Akin for his understanding of how credit unions serve their communities and the need to preserve credit unions' tax status," said MCUA President/CEO Mike Beall. "We appreciate his efforts and continued support."

Credit Union National Association (CUNA) Executive Vice President John Magill said CUNA welcomed members of the U.S. Congress reaffirming their support for credit unions and the tax status.

"The credit union tax status enjoys broad bipartisan support in Congress because the structure of credit unions remains the same as it was when credit unions were created," Magill said. "We are grateful that these members took the initiative to remind their colleagues of the important role credit unions play in the lives of their members."

Inside Washington (12/20/2011)

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  • WASHINGTON (12/21/11)--The Federal Reserve on Tuesday issued a package of rules viewed as the core of the Dodd-Frank Act. The rules were expected to be released this summer, but were delayed due to their complexity. The proposal includes measures addressing issues such as capital, liquidity, credit exposure, stress testing, risk management and early remediation requirements. The proposal generally applies to all U.S. bank holding companies with assets of $50 billion or more and any nonbank financial firms that may be designated by the Financial Stability Oversight Council as systemically important companies. The board will issue a proposal regarding foreign banking organizations shortly …

NCUA reschedules July open board meeting

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ALEXANDRIA, Va. (12/21/11)--The National Credit Union Administration (NCUA) Tuesday announced it has rescheduled its July open board meeting, moving it to Tuesday, July 24.

The meeting was set to take place on Thursday, July 19. The meeting still is scheduled to start at the customary 10 a.m. (ET) time.

The dates for the NCUA's other 2012 board meetings are:

  • Jan. 26;
  • Feb. 16;
  • March 15;
  • April 12;
  • May 24;
  • June 21;
  • Sept. 20;
  • Oct. 18;
  • Nov. 15; and
  • Dec. 13.
The agency does not usually schedule a board meeting for the dog days of August, although this past year the agency scheduled a special open meeting for that month to discuss the corporate credit union stabilization fund assessment.

The 2012 board meeting schedule may be subject to further changes, as is the case any year.

CUNA seeks comment on CFPB reg streamlining plans

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WASHINGTON (12/21/11)--The Credit Union National Association (CUNA) has asked credit unions to identify their highest priorities for updating, modifying, or eliminating specific provisions of regulations that are outdated, unduly burdensome, or unnecessary in a comment call on the Consumer Financial Protection Bureau's (CFPB) plans for regulatory streamlining.

The CFPB this month announced it would accept public input on how to best streamline over one dozen rules that it will soon inherit from seven federal agencies "to make it easier for banks, credit unions and others to follow the rules" and ensure that regulations work better for consumers and the firms that serve them.

Under the Dodd-Frank Act, rulewriting authority for more than 12 consumer protection laws was transferred from the National Credit Union Administration, the Federal Reserve, the Department of Housing and Urban Development, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the Office of Comptroller of the Currency and the Office of Thrift Supervision.

The CFPB plans to consider simplifying some regulations, standardizing some common terms across regulations, updating outdated or unneeded regulations, and removing unnecessary restrictions on consumer choice or business innovation.

That agency is accepting comment on which currently required disclosures could be considered for modification or removal. The CFPB also specifically has requested comment on regulations covering annual privacy notices, ATM fee disclosures, the coverage and scope of Home Mortgage Disclosure and Truth in Lending regulations, ability-to-pay standards, credit card debt electronic disclosures, and the Interstate Land Sales Full Disclosure Act.

The CFPB has set a March 5 deadline for public comments on the proposal, but CUNA plans to work with credit union leagues, the American Association of Credit Union Leagues' Regulatory Advocacy Advisory Committee, key CUNA subcommittees, credit union councils, and other credit union officials to develop a response well before this comment deadline. CUNA also is using its Operation Comment platform to encourage credit unions to provide their own comment to the CFPB.

For the full comment call, use the resource link.

Private insurance could augment NFIP study says

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WASHINGTON (12/21/11)--Premiums charged to policyholders under the National Flood Insurance Program (NFIP) are, in some areas, "too high," and allowing more private insurers to enter the market could increase coverage for many homeowners and lower their flood insurance costs, a recent study by the University of Pennsylvania's Wharton School said.

The Wharton study focused on Galveston and Travis Counties, two Texas counties that are frequently impacted by floods, and calculated "actuarially fair" flood insurance premiums for more than 300,000 residences in these counties.

These calculated rates were compared to actual rates charged by the NFIP, with some of the calculated rates coming in higher than the NFIP rates and some featuring lower totals than the NFIP rates. NFIP premiums were double the calculated rates in a moderate flood risk area of Travis County, and were 16 times the calculated rate in portions of Travis County, which has a lower risk of flooding.

"This presents opportunities for private insurers to provide coverage in some of those areas, to complement the NFIP," study co-author Erwann Michel-Kerjan said.

"There are several practical barriers that would need to be addressed for private insurers to sell such coverage, but if done, this could significantly increase the number of residents with proper coverage, thus reducing the need for government disaster relief," he added.

The NFIP is important to credit unions because the mortgages they write for properties in a floodplain are required to have flood insurance.

The NFIP is administered by the Federal Emergency Management Agency, and was established after private insurance entities refused to offer flood insurance. It is typically reauthorized every few years.

The insurance program will be extended until May 31 once President Barack Obama signs a $1 trillion omnibus federal government funding bill into law. That bill was approved by both branches of the U.S. Congress late last week.

The NFIP was set to expire on Dec. 16. That program has been funded by short-term resolutions for months, as both Democrats and Republicans, including Senate Banking Committee Chairman Tim Johnson (D-S.D.) and ranking minority member Richard Shelby (R-Ala.), have called for the program to be reformed.

The Credit Union National Association supports the short term NFIP extension, but has said a longer term extension should be considered.

FinCEN delays use of new SAR CTR reporting forms

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WASHINGTON (12/21/11)—The Financial Crimes Enforcement Network (FinCEN) has pushed back the deadline for credit unions and others to use its new Currency Transaction Report (CTR) and Suspicious Activity Report (SAR) forms until March 31, 2013.

FinCEN had proposed that the new SAR and CTR forms be used as of June 30, 2012.

FinCEN in a release said the deadline delay is a response "to industry concern about having sufficient time to transition to the new reports, including any necessary changes to their internal processes and/or IT systems."

The Credit Union National Association supported additional time for a transition period and supports this extension.

The SAR and CTR changes, which were approved earlier this year, are technical in nature, and do not include any new regulatory requirements or changes related to current report requirements, FinCEN said. The changes were made to ease the transition from the current paper SAR form submission model to a newer electronic filing model.

FinCEN had proposed that the new SAR and CTR forms be used as of June 30, 2012, and the agency is also considering requiring e-filing of SARs, CTRs and Designations of Exempt Persons (DEPs) reports on that same date.

FinCEN has said the switch to all-electronic filing would improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information.

Increased Bank Secrecy Act (BSA) E-Filing would also help FinCEN provide information relevant to money laundering and terrorist financing investigations to law enforcement in the quickest manner possible, shortening the lag time between when BSA reports are filed and when they can be accessed by authorities to two days. (See related Sept. 15 story: FinCEN proposes to make BSA e-filing mandatory)