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Washington Archive

Washington

CUNA Provides Ads For CU Tax Fight Counterpunch

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WASHINGTON (2/13/13)--As bankers intensify their state-level attacks against the credit union tax status, the Credit Union National Association is developing a toolkit to help credit unions connect with their members and educate the public on credit unions.

"Banks are trying to take advantage of state governments search for new sources of revenue by pushing for credit union tax status changes. It's time to remind credit union members of the benefits they receive by being a member: the trust they have in their credit unions, the ownership structure, and the fact that they are locally controlled," CUNA Senior Vice President of Political Affairs Richard Gose said.



CUNA's reminder to members and the general public will come in the form of radio ads, print ads, newsletter articles and social media outreach efforts. The CUNA-produced materials are available to all state credit union leagues, free of charge.

One of the minute-long radio ads highlights the credit union difference, noting that credit unions "provide members with services they want, not products that going to generate a tidy profit for a few investors.

"Loan decisions are made locally, not by bureaucrats and computer models from across the country," the ad states. The radio ad also encourages listeners to learn more about credit unions and find their own local credit union through aSmarterchoice.org.

The pro-credit union radio spots have already been sent to the leagues where state banker associations are actively trying to challenge the credit union tax exemption.

To access the resources, use the link.

Preserving the tax status of credit unions is CUNA's top priority. Under the Federal Credit Union Act, federal and state-chartered credit unions are exempt from federal income tax because they are cooperatives operated for and by their members, and because credit union shares are essentially members' deposits. The tax status has been re-affirmed periodically by the U.S. Congress and is supported by many lawmakers.

New LinkedIn Page Features NCUA Info

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ALEXANDRIA, Va. (2/13/13)--The National Credit Union Administration will provide up-to-the-minute news, job postings and exclusive information on upcoming recruitment events through a new page on the social network website LinkedIn.

The monthly NCUA Report newsletter, the FOCUS newsletter from NCUA's Office of Small Credit Union Initiatives, and the credit union locator app will all be posted on the LinkedIn page.


LinkedIn is the world's largest professional network on the Internet, with more than 200 million members in more than 200 countries and territories. 

For the NCUA LinkedIn page, use the resource link.

NCUA Offers Feb 20 Net Worth Webinar

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ALEXANDRIA, Va. (2/13/13)--Common causes of net worth declines and net worth restoration plan basics are among the issues that will be covered during a Feb. 20 National Credit Union Administration webinar.

The free webinar will be presented by the NCUA's Office of Small Credit Union Initiatives (OSCUI). It is scheduled to begin at 2 p.m. ET.

OSCUI staff during the webinar will:

  • Review NCUA's capital requirements for credit unions and the net worth restoration plan process;
  • Discuss the minimum regulatory requirements for net worth under Prompt and Corrective Action and Part 702 of NCUA's Rules and Regulations;
  • Address restoration plan timelines; and
  • Discuss assistance available for credit unions that are developing a net worth restoration plan.
The NCUA said webinar participants will also have the opportunity to gain insight from a staff member of a credit union that has gone through the net worth restoration plan process.

For the full NCUA release, use the resource link.

State Of the Union Highlights CUNA/CU Priorities

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WASHINGTON (2/13/13)--President Barack Obama's Tuesday night State of the Union address helped to shine the spotlight on two key credit union issues and reflected two of the Credit Union National Association's action priorities for 2013.

Among his wide-ranging topics, the president detailed areas of economic recovery and underscored the continuing need for job growth.

"A growing economy that creates good, middle-class jobs--that must be the North Star that guides our efforts. Every day, we should ask ourselves three questions as a nation: How do we attract more jobs to our shores? How do we equip our people with the skills needed to do those jobs? And how do we make sure that hard work leads to a decent living?" the president said in his remarks.

Just this week the U.S. Small Business Administration (SBA) issued a report, which it said demonstrates that small businesses have been at the core of our economy's growth over the past few years. 2011 represented the second full year of economic expansion since the peak of the recession in 2009, with small businesses representing half of the private-sector output, according to the SBA.

Furthermore, the SBA report said small firms with fewer than 500 workers outperformed large firms in net job creation in three of the four quarters of 2011, similar to a pattern that has existed since 1992 in periods when private-sector employment rose.

"Small businesses need access to credit to help their businesses grow--to keep driving the economy on. Credit unions are there to help them with their credit needs and stand ready to do even more," CUNA President/CEO Bill Cheney noted Tuesday night.

"Congress needs to help credit unions help small businesses by increasing our member business lending cap now," Cheney said.

CUNA, the state credit union leagues, credit unions and small business representatives support bi-partisan legislation that will increase the MBL cap to 27.5% of assets, up from 12.25%. Increasing the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment--and at no cost to taxpayers, according to CUNA estimates.

Also during his address, Obama noted extensive policy talks to address tax laws. Preserving the credit union tax status is a top CUNA priority.

"Credit unions were not mentioned in the president's tax policy remarks, nor did we expect they would be. However, the country's focus on tax issues and deficit reduction make it clear that CUNA must remain primed and vigilant on this issue," Cheney said.

CUNA and the leagues are monitoring tax policy issues on both the federal and state levels. (See related story: CUNA Provides Ads For CU Tax Fight Counterpunch)

Senate Banking Eyes Mortgages, Appraisals, Exams And More

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WASHINGTON (2/13/13)--Mortgage origination, appraisals, examinations, interactions with the Consumer Financial Protection Bureau and risk management will be among the issues of interest to credit unions that will be examined by the Senate Banking Committee in the 113th U.S. Congress, Committee Chairman Tim Johnson (D-S.D.) said in a Tuesday release.

The release said the committee would also continue to review the examination policies of federal financial regulators, ensuring that examinations are balanced in a manner that does not discourage prudent lending while promoting consumer protection and safety and soundness. Financial data security, Wall Street reform oversight and housing finance and consumer protection issues will also be high on the committee's list of priorities.

"The committee has important work to do in the 113th Congress, and I intend to work across the aisle to build consensus and find solutions to strengthen and sustain our economic recovery," Johnson said. He noted the committee has a proud history of bipartisanship. "From protecting consumers and taxpayers from Wall Street abuses, to providing the Federal Housing Administration with additional tools to manage its finances while continuing to serve American families, I believe we can and must find common ground," he added.

Johnson said the committee plans to monitor and potentially address consumer financial services, including:

  • Credit cards;
  • Private student loans;  
  • Prepaid cards;
  • Mobile payments;
  • Consumer credit reporting and scoring;
  • Payday loans;
  • Overdraft coverage programs; and
  • Deposit advance programs.
Financial protection issues that impact the military community will also be discussed. Reauthorizing certain expiring programs and quickly considering President Barack Obama's nominees will also be priorities, Johnson said.

The Native American Housing and Self-Determination Act, the Defense Production Act, Export Import Bank authorization, public transportation and roadway spending authorizations and terrorism risk insurance provisions are among the items that will expire in 2013 or 2014, the release noted.

The committee will hold the first hearing of 2013 when federal banking regulators testify on Wall Street reforms, financial stability oversight and consumer and investor protections on Feb. 14.

For more on the committee's priorities for the 113th Congress, use the resource link.

FHFA Abandons Force-Placed Plans

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WASHINGTON (2/13/13)--The Federal Housing Finance Agency (FHFA) has reportedly abandoned a plan to lower force-placed insurance premiums for homeowners, instead opting to study the issue.

The agency will develop a working group to study the force-placed insurance issue and evaluate how force-placed insurance impacts Fannie Mae.

"FHFA's objective is consistent with what Fannie Mae was working to accomplish--to reduce costs--but to do so with all the pertinent information and in a manner that will work for both [government sponsored enterprises (GSEs)]. This is a responsible and measured approach to put policy in place that is beneficial for both GSEs, consumers, and the industry at large," FHFA Office of Housing and Regulatory Policy Senior Associate Director Meg Burns said.

Under a plan submitted to the Federal Housing Agency last October, Fannie Mae would require banks and other mortgage servicers to replace existing force-placed policies on loans it guarantees with insurance provided by a consortium of carriers offering 30% to 40% discounts.

Force-placed insurance is a form of hazard coverage banks buy to protect the properties of buyers who have let their homeowners' insurance lapse. Under standard mortgage terms, borrowers are contractually obligated to maintain hazard insurance. In the event that homeowners fail to maintain such coverage, mortgage servicers are entitled to buy force-placed coverage on their behalf and bill the homeowners.

Some consumer advocates and insurance regulators have criticized banks for reinsuring or collecting commissions on the force-placed insurance policies they buy, saying the policies amount to kickbacks and inflate the price of coverage. Credit Union National Association General Counsel Eric Richard noted that consumer abuse in the forced placement market has attracted the attention of the Consumer Financial Protection Bureau.

CFPB Clarifies CUNA Small Servicer Concerns

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WASHINGTON (2/13/13)--The Consumer Financial Protection Bureau's exemption for "small" mortgage servicers will not apply to a third party subservicer if a credit union contracts with a third-party that services more than 5,000 mortgages, the agency has clarified.

Credit unions recently asked the Credit Union National Association to clarify how the CFPB's "small servicer" exemptions would impact their work with mortgage subservicers.

Under a final mortgage servicing rule released last month, mortgage servicers will need to meet new periodic statement requirements, provide additional notices of rate changes on adjustable-rate mortgage loans to borrowers and help ensure that consumers know their options to prevent foreclosures. The regulations are set to come into effect in Jan. 2014. The servicing rule contains a number of exemptions for credit unions and other financial institutions that meet the bureau's "small servicer" definition.

Subservicers that service more than 5,000 mortgages will need to comply with all of the regulation's requirements, CUNA Federal Compliance Counsel Colleen Kelly said. "Of course, a credit union needs to make sure that its contract with the subservicer assures compliance," she added.

CUNA Associate General Counsel Jared Ihrig said more questions may arise as credit unions implement the new CFPB regulations. "CUNA will maintain an open dialogue with the CFPB on this and other regulatory issues," he added.