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Cheney in iThe Hilli CU message will shine in D.C.

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WASHINGTON (2/16/11)—Members of Congress will soon be hearing personally from more than 4,000 credit union representatives as they voice their deep concerns on possible debit interchange fee changes, Credit Union National Association (CUNA) President/CEO Bill Cheney noted Tuesday in The Hill newspaper’s online Congress Blog. Cheney in his blog post told legislators that “credit unions are coming.” The throng of more than 4,000 will be one of the largest crowds to ever attend CUNA’s Governmental Affairs Conference (GAC), which will take place from Feb. 28 until March 3. The interchange law and related restrictions proposed by the Federal Reserve will be a focal point of Hill visits, Cheney said. The proposal, which was released earlier this year and remains open for comment until Feb. 22, could cap interchange fees at as low as 7 cents. Cheney in his blog post said that the proposed fee limits will likely force credit unions to charge their members for access to debit card programs. Cheney added that while the Fed proposal does exempt credit unions with under $10 billion in assets from the interchange changes, the new rules will affect how credit unions serve their members, because the law and rules do not give the Fed authority to enforce the exemption. Another key focus of credit union advocacy during the GAC will be the positive benefits of the federal tax exemption for credit unions. The tax exemption is central to the structure of individual credit unions and the larger credit union system, and its loss would likely mean the demise of most credit unions, which Cheney called a huge loss to consumers. Credit union backers will also speak in support of changing current supplemental capital rules. Allowing credit unions to raise supplemental capital would help them more effectively meet any unexpected changes, such as a slow economic recovery, Cheney said in his blog post. The ongoing economic recovery could also be helped by giving credit unions greater authority over member business lending. Raising the current 12.25% of assets cap on member business lending to 27.5% of assets will add over $10 billion in new funds into the economy and create over 100,000 new jobs, and credit union supporters will tout these benefits during the GAC. Credit union representatives will also advocate for the rights of their members, working to protect those members from rising costs and to ensure that credit union members will have access to their institutions for a long time to come, Cheney added. “The overall message they will deliver: Credit unions are the consumers’ best option for conducting financial services,” Cheney said. For the full blog post, use the resource link.

CLF CDRLF addressed in 2012 budget

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WASHINGTON (2/16/11)—The maximum loan limitation of the National Credit Union Administration's (NCUA) Central Liquidity Facility (CLF) will continue at its fiscal 2011 level under the Obama administration’s proposed budget for fiscal 2012. The CLF is authorized by the Federal Credit Union Act to lend up to 12 times its paid-in capital. The CLF loan cap was lifted to its maximum amount allowable in late 2008, and the NCUA in 2009 used $10 billion in borrowed CLF funds to stabilize two now failed corporate credit unions, U.S. Central FCU and Western Corporate FCU. The $10 billion, which was borrowed from the U.S. Treasury, was repaid, with interest, by the NCUA in October. Under the Obama administrations proposed 2012 budget, funding for the NCUA’s Community Development Revolving Loan Fund (CDRLF) program would remain at $2 million, equal to 2011’s requested funding level. The CDRLF provides loans and technical assistance to federal and state credit unions that are designated as a low-income credit union, as defined by NCUA regulations. Though the CDRLF was approved for $2 million this year, that amount could decrease substantially if H.R. 1, which was introduced by House Republicans last week, is approved. H.R. 1 would cut $1.5 million from the CDRLF’s requested fiscal 2011 budget of $2 million. If the Republican proposal is not accepted by both legislative branches and approved by the President, then the CDRLFs current funding level will likely be extended for a short period of time. Under a continuing resolution, the U.S. government will be funded through March 4. If a new agreement is not reached, a temporary agreement to continue to fund the government at current levels beyond March 5 is expected to be passed. The 2012 budget, which was released on Monday, also suggests cuts to Small Business Administration programs and Community Development Financial Institution Fund programs. (See related Feb. 15 story: $3.7 trillion budget brings deficit to record $1.6 trillion)

CUNAs Smarterchoice to help consumer CU awareness

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WASHINGTON (2/16/11)--aSmarterChoice.org, a new website developed by the Credit Union National Association and associated state credit union leagues, will offer information on credit unions to potential members and press professionals alike when it formally debuts on Feb. 28.
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CUNA President/CEO Bill Cheney noted that the website gives the credit union movement a sustainable presence that can continually drive membership growth – without the overhead and logistical challenges that a national branding campaign can present. “New technology can give us an affordable opportunity to be as equally effective as a brand campaign,” he added. A central piece of the new website will be the first consolidated and comprehensive Web-based credit union locator. The tool will allow users to view the location of any credit union they choose, regardless of their charter, affiliation, size or business model. The website will also include basic information about credit unions and the latest national, regional and local news coverage of credit unions The release of the website is aimed to coincide with CUNA’s 2011 Governmental Affairs Conference, which will take place between Feb. 28 and March 3 in Washington, D.C. The site is free of charge for individual users and credit unions.

Inside Washington (02/15/2011)

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* WASHINGTON (2/16/11)--Washington (2/16/11)--The Federal Housing Finance Agency (FHFA) on Jan. 18 announced a joint initiative to consider alternatives for a new mortgage servicing compensation structure. As part of that effort, FHFA has established dedicated web links for posting information and accessing background materials, it announced Tuesday … * Washington (2/16/11)--Neil Barofsky, the U.S. Department of the Treasury’s special inspector general for the Troubled Asset Relief Program (SIGTARP), has announced his resignation, effective March 30. Christy Romero, who serves as Barofsky’s deputy, will succeed him. Barofsky is the first person to hold the position, which was created in 2008. In his role, he has provided quarterly updates to Congress on TARP-related programs. Under Barofsky, SIGTARP has published 13 audits and nine quarterly reports. His office currently is coordinating 140 investigations of financial fraud. In his resignation letter, Barofsky said: “When it began, I had three goals for SIGTARP: to build a robust law enforcement agency to bring to justice those who sought to profit criminally from TARP and to deter those considering such misconduct; to ensure transparency in the operation of TARP so that taxpayers could better understand how the government was utilizing the unprecedented investment of taxpayer funds that TARP represented; and to provide effective oversight over the government’s decision-making process to minimize instances of waste, fraud and abuse. I believe that SIGTARP has met each of these goals” …

2011 HMDA requirements outlined by NCUA

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ALEXANDRIA, Va. (2/16/11)—The National Credit Union Administration (NCUA) in its Regulatory Alert No. 11-RA-02 is reminding credit unions that engage in residential mortgage lending of their 2011 reporting obligations under the Home Mortgage Disclosure Act (HMDA). Credit unions with over $40 million in assets that have originated or refinanced one or more mortgages secured by a first lien and have a home or branch office in defined metropolitan statistical areas will be subject to HMDA in 2011, the NCUA said. All other credit unions will be exempt from HMDA reporting requirements, the agency added. All 2011 information must be reported to the Federal Reserve no later than March 1, 2012. The Fed will examine this data to determine whether financial institutions are complying with fair lending laws. The Credit Union National Association (CUNA) last year recommended that the Fed take a "bright line" approach to HMDA reporting, limiting the need for HMDA reports to situations in which there is a lien on a given home. CUNA also suggested that HMDA requirements only be applied to the largest mortgage lenders that make the vast majority of mortgage loans. The Fed is currently considering whether some portions of its HMDA regulations should be altered. For the full NCUA regulatory alert, use the resource link.

House panel to look at repeal of Form 1099-MISC changes

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WASHINGTON (2/16/11)—The House Ways and Means Committee has scheduled a look Thursday at a growing push to repeal a tax provision that would force companies to send 1099-MISC forms to any entity that has provided $600-worth of goods. The Credit Union National Association (CUNA) backs the repeal efforts. CUNA has said the requiring 1099-MISC forms on goods is an extremely burdensome reporting concept. It will require businesses to gather tax identification numbers and generate many millions of new tax forms that, CUNA maintains, will have questionable value in actually increasing federal revenue. Credit unions and other businesses have long been required to report to the on Form 1099-MISC certain payments of $600 or more that will be considered income by the IRS. As a "pay-go" effort to offset the cost to taxpayers of the new healthcare reform law, Congress extended the 1099-MISC reporting provisions to cover payments for goods valued over $600. Sen. Debbie Stabenow (D-Mich.) earlier this month successfully added a repeal provision to a pending Senate bill when she and 80 of her colleagues voted in favor of her amendment to S. 223. That bill is expected to pass the Senate this week. In the House, a repeal bill sports 271 cosponsors, representing enough backing to pass the measure when it come to a full House vote. The Obama administration also favors repeal. The hearing will begin at 9 a.m. (ET), and will be led by committee chairman, Rep. Dave Camp (R-Mich.). For more information on the hearing, use the resource link.