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iReutersi names CUs as a financing trend for 2011

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WASHINGTON (12/30/10)—Credit unions were among “financing trends for 2011” noted in a recent Reuters article that told small business owners that credit unions could be among the forces that have a real impact on financing needs in the coming year. “These cooperative financial institutions are among the most active in making smaller loans to entrepreneurs and have only gotten busier in recent years, according to the National Credit Union Administration (NCUA),” the article noted. “(NCUA) figures show credit unions made more than $33 billion worth of business loans in 2009, up from $12 billion in 2004.” Reuters pointed out the lower default rates of credit unions loans, and noted that rates and terms that “are often better than traditional banks,” according to the NCUA and even federal-bank-regulator, the Federal Deposit Insurance Corp. The article informs readers that they have to be a credit union’s member to obtain a loan. The other trends mentioned in the article were microlending, the “slow-money movement,” where investors use patience to get returns from “socially responsible companies,” “bootstrapping,” which is when an entrepreneur taps personal savings, gets vendors to front start-up supplies for delayed payment terms, hits up friends and relatives, or uses one money-making venture to fund another, and, finally, even “crowdfunding,” a term used to describe when a large group of people help fund a project or business by clustering small donations.

Inside Washington (12/29/2010)

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* WASHINGTON (12/30/10)--The Crash Network, a group of under-30 professionals looking for deeper involvement in the credit union industry, is seeking applicants for its 2011 “Crash the GAC.” The “crash” concept is the group’s way of gently nudging its way into mainstream credit union meetings to rub shoulders with system leaders and create networking and educational opportunities. The group is looking for 15 young professionals to take part in the 2011 Credit Union National Association’s (CUNA) Governmental Affairs Conference, Feb. 27-March 3, at the Washington Convention Center, Washington, D.C. Interested candidates, who must work for a league/CUNA-affiliated credit union, can fill out an application at www.CrashtheGAC.com. Applications are due Jan. 14. PSCU Financial Services will be the official Crash the GAC sponsor and cover the cost of crashers’ lodging, meals, and a reception. CUNA’s Center for Professional Development has offered full scholarships for crashers to attend the conference ...

New FCRA risk-based rules kick in on Saturday

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ALEXANDRIA, Va. (12/30/10)—For months, the Credit Union National Association has been advising credit unions that the Fair and Accurate Credit Transactions Act's (FCRA) risk-based pricing regulations, which become effective on Jan. 1, will require credit unions to provide risk-based pricing notices to each consumer in situations where two or more consumers are granted, extended, or otherwise provided credit. The National Credit Union Administration (NCUA) also is reminding credit unions of the rule’s effective date and requirements. In a Regulatory Alert signed by Chairman Debbie Matz, the NCUA noted the following:
* If a credit union offers risk-based pricing loan programs and uses credit scores to determine the annual percentage rate charged to each borrower, it will need to comply with the upcoming changes to risk-based pricing notices. * The new requirements take effect on Jan. 1 as a result of rules issued by the Federal Reserve Board and the Federal Trade Commission. * The two agencies’ rules are substantively identical and can be found at 12.CFR Part 222 and 16.CFR Part 640 and 698, respectively. The rules are meant to complement the existing adverse action notice provisions of the FCRA. * Section 615(h) of the FCRA generally requires a user of consumer reports to provide a risk-based pricing notice to a consumer. The notice is required when a credit union uses a consumer report in connection with an application, extension, or other provision of credit and, based on the consumer report, grants, extends, or provides credit on terms that are materially less favorable than terms the credit union has extended to other consumers. Section 615(h) does not apply to an application primarily for a business purpose. * The rules provide alternative means by which a credit union can determine who should receive a risk-based pricing notice. The rules also include certain exceptions to the general rule, including exceptions for creditors that provide a consumer with a disclosure of the consumer’s credit score.
The NCUA alert noted that the risk-based pricing notice requirement is designed primarily to improve the accuracy of consumer reports by alerting consumers to the existence of negative information on their reports. Consumers will be able to check their reports for accuracy and correct any inaccurate information. The agency enclosed, with the alert, the “Interagency Examination Procedures" examiners will use, and a questionnaire that will help a credit union document its compliance.

CUNA keeps CU hum before administration officials

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WASHINGTON (12/3010)—The Credit Union National Association (CUNA) continued to bring credit union issues before key administration officials this month, making important points during a recent follow-up meeting with the White House National Economic Council (NEC). CUNA President/CEO Bill Cheney met with key NEC staff members to detail a range of significant credit union issues and concerns, including:
* The credit union tax status and its importance to consumers and the economy; * The need for increased member business lending (MBL) authority, a legislative initiative already supported by the Obama administration; * The need for supplemental sources of capital for credit unions, which are currently restricted to retained earnings for to build capital resources; * Credit union concerns regarding the Federal Reserve Board’s proposal to set government pricing on interchange fees; and * The impact on credit unions of the National Credit Union Administration’s budget increases for 2011, and CUNA’s request that the agency follow the administration’s proposed pay freeze for federal workers.
The meeting with NEC staffers was a follow-up to a session earlier this month between Cheney and NEC Director Lawrence Summers, who will turn over the reins of that position at the beginning of the new year. During the meeting, Cheney acknowledged the substantial support that the U.S. Treasury Department has thrown behind legislation to raise the statutory limit on member business lending to 27.5%--up from the current 12.25% limit. However, he urged the administration to be more active in its support of credit union priorities, particularly as proposals to reduce the deficit are considered in the U.S. Congress, and as CUNA continues to pursue MBL statutory improvements and supplemental capital in the new Congress.