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Washington Archive

Washington

Live UBIT update webcast from GAC

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WASHINGTON (2/19/08)—The Credit Union National Association (CUNA) will be staging a March 4 Webcast to present the most timely information on unrelated business income tax (UBIT), including an update on litigation and compliance issues. The Webcast will be broadcast live from CUNA’s Governmental Affairs Conference (GAC) held here from March 2-6. It will present an overview of the history of UBIT, as well as detail the status of a UBIT lawsuit filed in January by Community First CU against the Internal Revenue Service. Community First, based in Appleton, Wisc., is seeking a refund of taxes paid on income from several insurance products. The credit union said at issue is about $54,000 in taxes it paid in 2006 on income from the sale of credit life and credit disability insurance, and guaranteed auto protection (GAP) insurance. CUNA backs the credit union’s action and challenges recent opinions issued by the IRS stating that several insurance and investment products are subject to UBIT. CUNA strongly believes the activities are consistent with state-chartered credit unions' tax exempt purposes and, therefore, not subject to UBIT. The March 4 Webinar will be moderated by Larry Blanchard, UBIT Steering Committee chairman and CUNA Mutual Group SVP of special projects. Also scheduled to participate are: Eric Richard, CUNA general counsel, Faye Patzner, CUNA Mutual Group general counsel, Mary Martha Fortney, CEO, National Association of State Credit Union Supervisors, and Brett Thompson, President/CEO, Wisconsin CU League. The free Web session will be 2:00-3:15 p.m. ET. Use the resource link below to register for the Webcast.

Massachusetts Egan defines credit union CRA stance

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WASHINGTON (2/19/08)—Credit unions were not involved the discriminatory lending practices that brought about the Community Reinvestment Act in the 1970s and they already lend to their communities, said Dan Egan, president of the Massachusetts CU League, in a recent article. Countering calls from a Massachusetts banker to apply CRA to credit unions and other lenders, Egan said, “Credit unions are all about community. They’re already lending within their communities.” Anabela Pereira, chief executive of the Pioneer Valley FCU, backing up Egan’s statement, said federally chartered credit unions shouldn’t be covered by CRA because they’re so community-focused by nature. “We’re complying without even complying with the CRA,” said Pereira, of the Springfield-based credit union, in the article. The credit union officials made their remarks in a Feb. 18 Boston Herald piece, “Banker Wants CRA Expanded.” The article reported that Citizens Bank Chairman Lawrence Fish stirred up controversy within Massachusetts financial circles recently by insisting in a Washington Post column that CRA should apply to all credit unions and Internet banks. State-chartered credit unions in Massachusetts already are required to comply with CRA requirements. Fish, as chairman of Citizens Financial Group, also testified Feb. 13 before the House Financial Services Committee at its hearing, “The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain.” The committee is expected to conduct additional hearing on CRA, focusing on the law's relevancy today and ways in which it could be modified to better reflect the changing financial services environment.

NCUA issues prohibition orders against six

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ALEXANDRIA, Va. (2/19/08)--The National Credit Union Administration (NCUA) has issued orders prohibiting six individuals from participating in the affairs of any federally insured financial institution. The NCUA posted the following announcement its Web site:
* Herbert R. Hansen, a former manager at the merged Dorsey Laboratories FCU, Lincoln, Neb., pled guilty to embezzlement. Hansen was sentenced by the U.S. District Court of Nebraska to 15 months in prison followed by 5 years of probation and ordered to pay $298,414 in restitution; * Danielle Hartsell, a former teller at former Nor-Car FCU, Easton, Pa., consented to entry of a prohibition order against her prohibiting her from further participation in the affairs of any federally insured financial institution; * Kennae Rakeem Jeffries, a former employee at Honda FCU, Torrance, Calif., has been prohibited from participating in the affairs of an insured credit union or other federally insured financial institution and ordered to pay $61,541.75 plus interest in restitution; * Nathan Marcum, a former loan officer at the former U.S. Employees Butler County Ohio FCU, Fairfield, Ohio, pled guilty to credit union theft and filing a false income tax return. The U.S. District Court for Southern Ohio sentenced Marcum to 28 months in prison followed by three years of supervised probation, and he was ordered to pay $242,270 in restitution: * Angelica H. Sim, a former teller at Coastway CU, Cranston, R.I., pled no contest to charges of embezzlement and fraud before the Rhode Island Superior Court. Sim received a 5-year deferred prison sentence and was ordered to pay $28,000 in restitution; and *Irene Nancy Worona, a former teller at Mercer County Community FCU, Sharon, Pa., pled guilty to three counts of theft and was sentenced by the Mercer County District Court to three years of supervised probation.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. Use the resource link below to find NCUA prohibition orders online.

Inside Washington (02/18/2008)

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* WASHINGTON (2/19/08)--Representatives from the National Credit Union Administration’s (NCUA) Office of Public and Congressional Affairs answered questions and distributed materials at the National Consumer Protection Week Consumer Education Fair on Capitol Hill yesterday. NCUA was joined by several other federal agencies and consumer groups at the event, which helped raise awareness of the upcoming National Consumer Protection Week March 2-8, 2008. Credit Union National Association President/CEO Daniel Mica visited the NCUA booth during the event. From left are Mica and Jeremy Carl, NCUA associate director of external affairs. (Photo provided by CUNA) ...