Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive

Washington

CUNA gives planning insight in advocacy article

 Permanent link
WASHINGTON (12/7/11)--The 2012 House calendar, and its newly added feature of at least one "constituent work week" per month, is creating issues for associations that bring out-of-town advocates to Washington, CEO Update noted in a Dec. 2 article. However, Credit Union National Association (CUNA) Senior Vice President of Legislative Affairs Ryan Donovan told the publication that CUNA avoids these issues by scheduling fly-ins when House members are extremely likely to be in their D.C. offices.

House Majority Leader Eric Cantor released that chamber's 2012 calendar on Oct. 27, a date that is well past when most associations have scheduled meetings and booked hotels for the year.

CEO Update said that groups that have now learned that the House will be out during a week they have scheduled members to come for Capitol Hill visits must decide whether to keep their scheduled meetings to pursue meeting with lawmakers in U.S. Senate, which will be in session, reschedule the meeting to when lawmakers in both houses of Congress will be in Washington,  or cancel them altogether.

Donovan said CUNA has generally avoided a scheduling problem by planning fly-ins for "more predictable" weeks, like those that are directly after a holiday break—such as days following the July 4 break, or in September between Labor Day and the Jewish holidays of Rosh Hashanah and Yom Kippur.

CUNA has traditionally avoided traveling conflicts by scheduling its premier Governmental Affairs Conference on the week following Presidents Day. However, this year, due to outside circumstances, CUNA's GAC will be held March 18-22 at the Washington Convention Center. Luckily, the House calendar has cooperated and the House will be in session and the traditional Capitol Hills visits, which are an integral part of the GAC, are in good shape to proceed in force.

CUNA's GAC is the credit union movement's premier political event and its largest national conference, each year providing more than 4,000 credit union executives and board members an opportunity to hear influential leaders from the U.S. Congress, the administration and federal regulatory agencies.

American Idol star Taylor Hicks will perform at the 2012 GAC opening concert, and former Secretary of State Condoleezza Rice, journalistic duo Bob Woodward and Carl Bernstein, and political pundit Charlie Cook have signed on as keynote speakers for the 2012 GAC.

Additional speakers and session topics will be announced in the weeks to come. For more information and to register use the resource link below or go to gac.cuna.org.

NCUA IG reports material loss reviews have been focus

 Permanent link
ALEXANDRIA, Va. (5/25/11)--The National Credit Union Administration's (NCUA) Office of the Inspector General in its semi-annual report to the agency and the U.S. Congress said it has remained active in both audit and investigative matters, focusing on both material loss reviews and security-related issues.

The report covers the time between April 1 and Sept. 30. It summarizes the material loss reviews of Members United Corporate FCU, Beehive CU, Certified FCU, Constitution Corporate FCU, Southwest Corporate FCU, and the OIG also detailed the NCUA's own progress in improving its examination and supervision procedures for overseeing credit unions.

The OIG in 2010 recommended the agency take corrective actions related to its documentation, monitoring, exam procedures, quality control reviews and regulatory guidance, and, in this most recent report to Congress, the OIG said the NCUA "has made significant progress and is in various stages of implementing corrective action" on these and other recommendations.

The report also reviews the OIG's own internal security work, which included reviewing building security measures at the NCUA's Central Office and Region II facility and investigating allegations of misconduct and fraud by some NCUA employees.

The overall financial status of the credit union industry was also addressed in the report, with the OIG noting 0.3% total growth in assets, and an increase in the net worth to assets ratio of 0.08%, during the six-month period ended September 30. The OIG also noted that while total share accounts increased during this time period, the amount of loans taken out at credit unions fell slightly.

NCUA comments on key credit union issues, including the debit interchange fee cap and increasing the credit union member business lending cap, are addressed, as are other NCUA developments, including the naming of NCUA Chairman Debbie Matz to lead the Federal Financial Institutions Examination Council, the setting of the 2011 Temporary Corporate Credit Union Stabilization Fund Assessment, the creation of the NCUA Guaranteed Note oversight plan, and the finalization of the NCUA's Voluntary Prepayment of Stabilization Fund Assessments Plan.

CUNA's Examination and Supervision Subcommittee will be reviewing the report and following up on any issues of concern.

For the full NCUA OIG report, use the resource link.

NCUA promotes small CU office in new training video

 Permanent link
ALEXANDRIA, Va. (12/7/11)--The National Credit Union Administration's (NCUA) Office of Small Credit Union Initiatives (OSCUI) announced a free training video Tuesday, An Introduction to OSCUI, to give credit unions information on how services of  that division of the agency can help small credit unions " grow and thrive."

OSCUI Director Bill Myers said the free training video is one of a series of planned future training and informational videos "to underscore NCUA's commitment to the success of small, low-income and newly chartered credit unions."

The OSCUI administers the NCUAs Community Development Revolving Loan Program and aids small credit union development and member service. The NCUA said the 33-minute video provides a general outline of the OSCUI and gives tips on how to access its services.

The video addresses four small credit union programs. They are:

  • Direct assistance through one-on-one consulting;
  • Classroom-based and online training courses;
  • Financial assistance through grants and loans; and  
  • Partnerships with government, non-profit and private organizations.
NCUA Chairman Debbie Matz said in a release that the agency is "committed to making sure small credit unions are fully informed of all the resources available to help them succeed," Matz added.

Work to minimize Dodd-Frank impact continues Fed testifies

 Permanent link
WASHINGTON (12/7/11)--The Federal Reserve Board has made special efforts to identify and minimize the regulatory burden faced by credit unions and other small financial institutions, and assesses the potential impact that rules could have on small businesses, small governmental jurisdictions, and small organizations, as it implements rules under the Dodd-Frank Wall Street Reform Act, Fed Governor Daniel Tarullo testified on Tuesday.

Tarullo said the Fed has established a subcommittee of regulatory and supervisory oversight committee members "for the express purpose of reviewing all regulatory matters" from the perspective of credit unions and other small, community-based financial institutions. The reviews undertaken by this group "are intended to find ways to reduce the burden on community depository organizations arising from our regulatory policies without reducing the effectiveness of those policies in improving the safety and soundness of depository organizations of all sizes," he said.

The Fed's Community Depository Institutions Advisory Council (CDIAC) is also helping to address the needs of small financial institutions, Tarullo noted. The CDIAC has 12 separate district bank-based councils, and chairmen from each of these 12 councils serves on the Feds larger CDIAC, which meets twice a year in Washington, D.C. That group provides the Fed with input on the economy, lending conditions, and other issues. A number of credit union representatives serve on these councils.

Overall, the Fed governor testified, the Fed has issued 29 final rules, public notices, and reports, and has begun work on another 13 related rules. The Fed is expected to issue approximately 60 sets of rules and formal guidelines as part of its implementation efforts, and the Fed is "working diligently to complete the remaining rules," he added.

The Fed is trying to make its rulemaking process "as fair and transparent as possible, with ample opportunity for the public to comment," and is specifically seeking public comment on the costs and benefits of proposed rulemaking approaches, and what, if any, alternative approaches could be used.

Tarullo testified at a Senate Banking Committee hearing on the "Continued Oversight on the Implementation of the Wall Street Reform Act."  Deputy Treasury Secretary Neal Wolin, Securities and Exchange Commission Chairman Mary Schapiro, Commodity Futures Trading Commission Chairman Gary Gensler, Federal Deposit Insurance Corp. (FDIC) Chairman Martin Gruenberg, and acting Comptroller of the Currency John Walsh also testified during the hearing.

While the Credit Union National Association (CUNA) commends the objectives of the efforts referenced by Tarullo referenced, CUNA underscores that credit unions are overwhelmed by regulations with which they must comply, but which address problems credit unions generally weren't involved in.

Many of the regulations affecting credit unions that the Fed used to oversee have now been transferred to the Consumer Financial Protection Bureau, which has approached its responsibilities so far by reaching out to credit unions and other stakeholders before developing regulations. CUNA said it encourages the Fed to utilize this approach to a greater extent when fine tuning rules that will remain under its jurisdiction, such as Regulation D, which covers monetary control reserve requirements for transaction accounts, and provisions of Regulation E, Electronic Fund Transfer Act, which covers debit card interchange regulations.

CUNA will be following up with the Fed to pursue regulatory changes under that agency's authority that will benefit credit unions.

For more on the hearing, use the resource link.

SCE FCU Sonepco FCU merger approved by NCUA

 Permanent link
ALEXANDRIA, Va. (12/7/11)—The National Credit Union Administration said it has approved the merger of Sonepco FCU of Las Vegas into El Monte, Calif.-based SCE FCU.

The merger will give the 42,000-member, $497 million-in-asset SCE FCU entry into the Nevada market. The boards of both credit unions approved the merger earlier this year.

Sonepco FCU held $56 million in assets, and was organized in 1955 to serve employees of Nevada Energy and their families and other members of the local community. SCE was organized in 1952 and serves multiple employee groups, though it has historically served employees of Southern California Edison power company.

The boards of the merging credit unions approved the merger this summer and Sonepco CEO Sue Longson in a statement made at that time called the merger a natural progression since both credit unions have a history of serving employees at energy companies.

Inside Washington (12/06/2011)

 Permanent link
  • WASHINGTON (12/7/11)--While large banks are providing detail-filled resolution plans, regulators appear to have accepted condensed versions since the "living wills" requirement was finalized three months ago. As part of the Dodd-Frank Act, the Federal Deposit Insurance Corp. (FDIC) and Federal Reserve Board finalized rules in September that require large banks to provide resolution plans for how they would unwind in the event of failure (American Banker Dec. 6).  An initial plan and regular updates are required of firms with more than $50 billion in assets and nonbanks deemed systemically risky. But while a living will for the largest banks could run to thousands of pages, participants in recent discussions said the regulators have indicated an interest in "quality over quantity," according to the Banker. Regulators appear willing to work to build a dialogue with banks to develop proper plans if an institution can show regulators how to find information as needed, John Bovenzi, a partner in Oliver Wyman's financial services practice and former FDIC chief operating officer …
  • WASHINGTON (12/7/11)--The Federal Deposit Insurance Corp. (FDIC) is claiming the same rights as other banks in collecting losses from directors and officers of failed banks. In one instance, Sterling Bank in Spokane, Wash., pursued the $6 million it loaned to Bank of Clark County and another $1.14 million for regulatory fees from the loss (American Banker Dec. 6). Sterling filed a lawsuit against the bank's directors and officers in Superior Court for the State of Washington in May 2009. The FDIC has since intervened in the case, claiming it is owed $19 million from Bank of Clark County's directors and officers. The case has been moved to the U.S. District Court for the Eastern District of Washington. Both the FDIC and Sterling claim that Bank of Clark County's directors and officers breached their fiduciary responsibility and were negligent …
  • WASHINGTON (12/7/11)--The Commodity Futures Trading Commission (CFTC) issued final rules Monday making it more difficult to segregate customer funds from a derivatives firm's trading activities. The final rule was issued in the midst of ongoing efforts to resolve customer claims in the MF Global Inc. failure (American Banker Dec. 6). MF Global, already decimated by bad debts on European sovereign debt, declared bankruptcy Oct. 31 after an estimated $1 billion in funds from its customer accounts was reported missing. The CFTC had previously proposed restrictions on how firms can use segregated funds. But commission officials have called for stiffer regulations while investigating whether MF Global improperly raided customer accounts to fund its operations. The Commodity Exchange Act allows customer funds to be used for a list of certain investments. The CFTC previously had provided exemptions from that list, including the ability to invest money from customer accounts in highly rated sovereign debt instruments. Those exemptions are limited under the new rule …
  • WASHINGTON (12/7/11)--The U.S. Treasury Department announced the release of seven years of data provided by Community Development Financial Institutions (CDFIs) through a data collection system known as the Community Investment Impact System (CIIS).  The report, for fiscal years 2004 through 2010, contains Institution Level Report (ILR) data on 534 CDFIs that have reported to CIIS. In general, the report covers CDFI information on overall assets, loans, investments, sources and cost of capital, financing of day-to-day activities, staffing and impact in their communities. A previous data release in 2007 consisted of ILR data on 223 CDFIs in fiscal year 2003, 236 in fiscal year 2004, and 173 in fiscal year 2005. CDFI Fund Director Donna Gambrell said, "This comprehensive data release will be a valuable tool for researchers, academics, and the CDFI industry, and I believe it presents evidence of the tangible and lasting impact of CDFI investments in low-income communities. The CDFIs that submitted CIIS data for this report originated $10.9 billion in loans and investments from 2004 to 2010" …