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Camp says tax discussion draft will be out next week

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WASHINGTON (2/20/14)--House Ways and Means Committee Chairman Dave Camp (R-Mich.), in a memo to Republican committee members,  said he plans to release draft reforms to the U.S. tax code the week of Feb. 24 (Bloomberg BNA, Politico Feb. 19).
 
The Credit Union National Association will have 4,300 credit union advocates hitting Washington, D.C., for its Governmental Affairs Conference (GAC) starting Feb. 23 and Executive Vice President John Magill said earlier this week that the timing of having thousands of credit union advocates available for Capitol Hill meetings could not be any better with the expectation of the release of Camp's discussion draft for tax reforms (News Now Feb. 19).
 
It was almost exactly a year ago, in fact,  that House Speaker John Boehner (R-Ohio) used the CUNA 2013 GAC as the platform to discuss reform of the country's tax code.
 
In response to news of the Camp memo Wednesday, CUNA President/CEO Bill Cheney said, "For the past nine months, CUNA, the state credit union leagues, and credit unions have been contacting members of Congress and urging them 'Don't Tax My Credit Union.' After more than 1.3 million contacts with lawmakers through that campaign, we're hopeful that our advocacy message got through."
 
Cheney added, "Regardless of what is contained for credit unions, if anything, in Chairman Camp's plan next week, we will continue to defend the credit union tax exemption--because it's all about our structure as not-for-profit, cooperative financial institutions that exist to provide service to their members."
 
According to Bloomberg BNA, the Camp memo said now is the time to pursue a tax overhaul in the interest of boosting the economy. 
 
The article noted that if Camp sticks to his earlier outlines of draft reforms, his new legislation would cut back tax credits and deductions in pursuit of a lower tax rate.

CUNA urges Congress to change housing finance, data security laws

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WASHINGTON (2/20/14)--Congressional leadership is needed to ensure action is taken on housing finance reform and merchant data breaches, the Credit Union National Association said in Wednesday separate letters to House and Senate leaders.

The letters were sent to House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas), Ranking Committee Member Maxine Waters (D-Calif.), Senate Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Committee Member Michael Crapo (R-Idaho).

CUNA President/CEO Bill Cheney in the letter said CUNA is pleased by the progress that was made on housing issues in 2013. "With the economy in a fragile recovery and the housing market rebounding, now is the time for Congress to address changes to the housing finance system," Cheney added.

The CUNA CEO thanked the legislators for allowing CUNA to present credit union views on the issue, and said "it is critical that credit unions have equitable access to a functioning, well-regulated secondary market" once the reform process is complete.

"Equally important, new legislation should preserve the government guarantee of mortgages sold into the secondary market so that small lenders may continue to offer mortgage products with predictable payments, like the 30-year fixed rate mortgage," Cheney added.

U.S. Housing and Urban Development Secretary Shaun Donovan last week said Senate housing finance market reforms could be introduced soon.

Cheney also called on the Financial Services Committee to hold hearings on the recent Target data breach that cost credit unions an estimated $30.6 million. Data breach hearings have been held at the subcommittee level, and the full committee discussed the issue with federal regulators on Feb. 6. "We strongly encourage you to hold additional hearings on this matter, and call witnesses from the credit union system that can describe how these breaches affect credit unions and the members they serve," Cheney wrote.

He also said Congress must address inconsistent rules that require credit unions and other financial institutions to follow high security standards while exempting merchants.

"While we welcome the discussion, the pursuit and the deployment of new technology in the payment system, we are very skeptical that a solution to merchant data breaches can be achieved without first requiring all participants to follow similar data security standards. 

Further, until and unless merchants are held accountable for the damages that breaches to their systems cause financial institutions and consumers, we have little confidence that they will be incentivized to properly secure their systems," Cheney said.

For both letters to Congress, use the resource links.

NEW: CU financials continue positive trend, NCUA reports

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ALEXANDRIA, Va. (2/20/14, UPDATED: 2:25 P.M. ET)--The recent trend of positive financial results for the credit union system continued today, with the National Credit Union Administration reporting continued declines in the number of CAMEL code 3, 4 and 5 credit unions.

The NCUA in its quarterly report on the status of the National Credit Union Share Insurance Fund said there are currently 307 CAMEL 4 and 5 credit unions, which represent 1.40% of insured shares, or approximately $12.1 billion. NCUA staff also noted that there are 1,480 CAMEL 3 credit unions, which represent 11.19% of insured shares, or $96.9 billion. Combined, insured shares in CAMEL 3, 4, and 5 credit unions represent approximately 12.6% of total insured shares.

According to the NCUA, the amount of assets in CAMEL code 3, 4 and 5 credit unions have decreased 40.5% since reaching a high in September 2010. "The continuation of these positive trends and other factors contributed to a net decrease of $191.8 million, or 46.5 percent, in the Share Insurance Fund's reserve for insurance losses during 2013," the agency added.

The total number of credit union failures also declined last year, falling to 17 from the 2012 total of 22.

"Protecting the Share Insurance Fund is NCUA's top priority, and the 2013 year-end results reflect the agency's prudent management and effective approach to regulation," NCUA Chairman Debbie Matz said. "The metrics continue trending in the right direction. Liquidations and assisted mergers fell sharply, with a substantial drop in actual losses to the fund."

Key House CU supporters join still-growing GAC lineup

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WASHINGTON (2/20/14)--With the launch of its 2014 Governmental Affairs Conference just days away, the Credit Union National Association continues to add new voices to an already exceptional list of scheduled speakers. Reps. Sander Levin (D-Mich.)--the ranking member of the tax-policy oversight House Ways and Means Committee, Bruce Braley (D-Iowa) and John Larson (D-Conn.) are now also signed up to speak next week.
 
Levin said last year at the GAC that is "committed" to a tax code that "ensures important policies, like the credit union tax exemption, continue to serve the best interest of the American taxpayer." Levin said he has long supported credit unions and the critical role they play in communities across the country.
 
"Throughout the financial crisis, credit unions increased lending because of their cooperative membership structure--providing a needed lifeline to individuals and small businesses that other lenders and financial institutions could not," Levin added.
 
Larson, who is a credit union member, has told the Credit Union League of Connecticut he can "speak of first hand of the value that credit unions bring especially during difficult times, and the unique nature of the charter agreement." Larson also encouraged credit unions to remain vigilant as tax reform debates progress. Educating new legislators who may not be familiar with credit union ideals, structure and tradition of service excellence is of particular importance, Larson said.

Braley has made public remarks in support of another credit union priority, increasing the member business lending cap. The three-term House member last year told attendees at the Iowa Credit Union League's annual Legislative and Regulatory Conference last year that he believes in the value of MBLs and thinks there should be enough room for all parties involved. "To me, there should be plenty of room at the table for lenders doing commercial and business lending," he said.
 
More than 4,300 people are expected to attend this year's GAC, which will feature 230 companies represented in 360 exhibit hall booths.
 
The conference will be held Feb. 23-27 at the Walter E. Washington Convention Center.
 
For more on the GAC and its power-packed lineup of speakers, use the resource link.

St. Francis CU shuttered by NCUA

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ALEXANDRIA, Va. (2/20/14)--Central Minnesota CU, Melrose, Minn., has assumed the members, assets, shares and loans of St. Francis Campus CU after that Little Falls, Minn. credit union was liquidated last week.

The National Credit Union Administration announced the credit union closure last week.

St. Francis Campus CU was liquidated after the Minnesota Department of Commerce determined it was insolvent with no prospect for restoring viable operations on its own.

Central Minnesota CU CEO Rick Odenthal told the St. Cloud Times that an investigation by the NCUA, MDC, Little Falls Police Department and the Federal Bureau of Investigation uncovered irregularities at the credit union.

St. Francis Campus CU, which was chartered in 1963 to serve employees of the St. Francis Campus, their relatives and employees of the credit union, served 3,400 members and held $51 million in assets when it was shuttered.

St. Francis Campus Credit Union is the second federally insured credit union liquidation in 2014.

Former St. Francis Campus members will become Central Minnesota CU members, and they will experience no interruption in services. Their accounts will remain federally insured by the National Credit Union Share Insurance Fund up to $250,000, the NCUA said.

Central Minnesota CU is a federally insured, state-chartered credit union with 52,000 members and $759 million in assets.

Change is coming, CFPB's Antonakes warns mortgage servicers

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WASHINGTON (2/20/14)--Quick action will be taken against mortgage servicers that fail to properly notify homeowners when their loans are sold to other parties, or otherwise fail to follow new servicing regulations, Consumer Financial Protection Bureau Deputy Director Steve Antonakes said Wednesday.

Antonakes' remarks were made before the Mortgage Bankers Association's national mortgage servicing conference.

The CFPB has said it will not punish good-faith efforts to comply with new mortgage servicing rules. However, Antonakes warned that this leeway will only extend so far. "A good faith effort...does not mean servicers have the freedom to harm consumers," he said. The regulator said new servicers will need to honor existing loan modifications, whether they are trial or permanent modifications. So-called "shell games" will not be tolerated, he added.

"Affected credit unions are working hard to comply with CFPB rules and we are not aware of credit union servicers trying to dodge their legal requirements under the CFPB's servicing rule," Credit Union National Association Deputy General Counsel Mary Dunn said. "We have sought clarification from the CFPB that credit unions are not particular targets," she added.

Antonakes did not mention credit union mortgage servicing in his remarks.

New CFPB mortgage servicing rules, which went into effect on Jan. 10, require servicers to:
  • Maintain accurate records;
  • Give troubled borrowers direct and ongoing access to servicing personnel;
  • Promptly credit payments; and
  • Correct errors on request.
The rules also include new, stronger protections for struggling homeowners, including those facing foreclosure.

Overall, Antonakes said, he is "deeply disappointed by the lack of progress the mortgage servicing industry has made" in dealing with many market issues. "Too many customers continue to receive erratic and unacceptable treatment" from mortgage servicers, he added.

A New York Times DealBook blog post reported that homeowners are again starting to have issues with their servicers, with some consumers reporting specialty mortgage servicers levying incorrect fees, fast-tracking paperwork and wrongfully evicting some mortgageholders. Certain servicers are slow to upgrade their infrastructure, leading to unimpressive results, while others may be processing troubled mortgages quickly to collect their fees, DealBook reported.

"Our nation's mortgage servicers manage a debt portfolio of nearly $10 trillion for millions of American homeowners. This kind of continued sloppiness is difficult to comprehend and not acceptable. It is time for the paper chase to end," Antonakes said.