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CUNA posts positive financial results for 2010

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WASHINGTON (3/1/11)--Credit Union National Association (CUNA) Treasurer Dennis Pierce, president/CEO of Community CU, Lenexa, Kan., offered a positive review of the CUNA’s 2010 financial results during the association’s Annual General Meeting at the 2011 Governmental Affairs Conference (GAC) in Washington D.C. Both operating revenues and expenses were higher in 2010 than in 2009, but revenues increases outstripped expenses. Revenues from operations increased nearly $2 million, or 4% more than in 2009, while expense increases were less than 2% from 2009. Net assets increased to $11.6 million in 2010. CUNA’s operating margin was $2.2 million in 2010, exceeding the $1 million average of the previous six years. CUNA’s assets total $25.8 million, of which 69.8% is in cash and investments. Working capital is $10.8 million and net assets totaled $11.6 million at the end of 2010. For 2011, CUNA is budgeting $51.5 million in revenues and $50 million in expenses for an operating margin of $1.5 million. Pierce noted that 100% of member dues revenues are used for advocacy and advocacy-related functions. The financial information Pierce offered is unaudited and subject to change. Finalized financial statement will be posted on CUNA’s website. The GAC runs through Wednesday.

CU action can change conversation on Capitol Hill

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WASHINGTON (3/1/11)--Credit Union National Association (CUNA) Chairman Harriet May, president/CEO of GECU, El Paso, Texas, and CUNA President/CEO Bill Cheney offered highlights of “the most active year legislatively” in four decades for credit unions at CUNA’s Annual General Meeting during its Governmental Affairs Conference (GAC) Monday. They urged credit union leaders to “change the conversation” in Washington in 2011.
Click for slide show CUNA President/CEO Bill Cheney welcomes the more-than 4,000 participants who have come to Washington, D.C. for the 2011 Governmental Affairs Conference, as well as for Capitol Hill visits to discuss key credit union issues with federal lawmakers. Cheney told credit unions that their presence in Washington will make a difference on issues such as protection of the credit union tax status, interchange rules, supplemental capital and more. (CUNA Photo)
The CUNA GAC runs through Wednesday. Among the highlights of last year that May pointed to was the selection of Cheney as CUNA’s new leader. “The board said in July when choosing Bill that he was the right man for the right time for CUNA,” May said. “That has proven to be the case. We needed an experienced leader who could hit the ground running, and effect a sure and smooth transition. Bill has demonstrated strong leadership right from the start in the advocacy arena and in his management of the association.” Dan Mica retired from the leadership position after 13 years at the helm. May also noted CUNA’s role in facing regulatory, legislative and economic challenges in 2010. She emphasized CUNA’s role as a thought leader in tackling critical issues facing the credit union movement. “As your national trade association, CUNA can be a catalyst that helps bring the movement together to devise solutions to meet its many challenges,” May said. Cheney offered a list of credit union highlights for 2010. Among the successes was the continued independence of the National Credit Union Administration (NCUA). “We persuaded Congress to maintain the NCUA as the independent regulator of credit unions, and keep the National Credit Union Share Insurance Fund separate from the Federal Deposit Insurance Corp.,” Cheney said. Credit unions also limited the impact of the Consumer Financial Protection Bureau, formed under the Dodd-Frank Act. Of significance was credit union representation on the council that oversees the bureau’s rules. “That’s a mandate that the impact on credit unions must be considered in any rulemaking done by the bureau,” Cheney said. Cheney noted that 14 members of Congress (11 House members, three senators) now hold their seats thanks to special electoral programs of CUNA and state leagues. Eight were elected in the past year. Other highlights: the preservation of the $250,000 share insurance level for credit union members, positive press for credit unions, a strong blow against unrelated business income tax, and progress on the corporate credit union crisis. But challenges remain, Cheney said. Two areas where CUNA will continue to push hard: business lending and interchange. Although credit unions did not win expanded lending authority, they achieved considerable congressional support on both sides of the aisle, he added. As for interchange, CUNA and the leagues generated more than one million contacts with Capitol Hill to voice credit union opposition to the legislation, Cheney said. Their message to Congress: Stop, study--and start over. "This legislation is a train wreck for consumers,” Cheney said. “We're gaining traction, but we're going to need your help." Cheney cited the continued tax exempt status of credit unions, alleviating credit unions’ regulatory burden, and supplemental capital as other challenges for 2011. It’s important that credit unions strive to form a unified vision, he said. In his remarks earlier at the GAC’s opening general session, Cheney urged credit unions to “change the conversation” in Washington with a collective voice that serves 93 million consumers and has a solid-track record of serving consumers during a recession when many banks turned customers away. Between December 2007 and September 2010, business lending by credit unions grew by more than 39%, while bank business lending declined by more than 18%. Overall lending by credit unions, for that period, expanded 7.6% while banks’ overall lending declined by 6.5%. “We’re here to stay,” Cheney said. “We have a big voice; let’s put it work. We have served, prudently, when others wouldn’t. We can continue getting the good press we have received; we just have to continue to tell our story.” As evidence of the credit unions’ ability to influence the conversation, Cheney cited a GAC speaker slate that includes House Speaker John Boehner (R-Ohio.), Sen. Mark Udall (D-Colo.), Rep. Spencer Bachus (R-Ala.), Sen. Roy Blunt (R-Mo.), Rep. Debbie Wasserman Schultz (D-Fla.), Sen. Mike Crapo (R-Idaho), Rep. Shelley Moore (R-W. Va.), Sen. Jon Tester (D-Mont.), and House Majority Whip Kevin McCarthy (R-Calif.). Also, outgoing CUNA Chief of Staff Rich McBride was honored with a board resolution recognizing his 14 years of service with CUNA.

Hudson miracle recounted by Capt. Sully

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WASHINGTON (3/1/11)--Airline Capt. Chesley B. “Sully” Sullenberger III mesmerized the Monday session of the Credit Union National Association Governmental Affairs Conference with his vivid description of the crash landing in the Hudson River Jan. 15, 2009, that made him a national hero. He attributed the positive outcome and rescue to the training of his
Click to view larger image Capt. "Sully" Sullenberger (left) is greeted by CUNA President/CEO Bill Cheney just before the captain recounts the ordeal that made him a national hero. (CUNA Photo)
crew, and the cooperation of the passengers. Sullenberger, who opened his presentation by describing himself as a “30-year proud member of a credit union,” described the crash and rescue in an approximate 45-minute speech. Standing in the middle of the stage, and speaking without notes, Sullenberger made these points:
* Because the plane went down in 43 seconds, there was virtually no time for himself or his co-pilot to communicate. “Everything we did, we did intuitively,” he said. “Before the landing, there was no sound in the plane. You could hear a pin drop.” * “The forced calm that is part of our profession was the result of a lifetime of training. It resulted in imposing order where there could have been chaos.”
Sullenberger said despite the tension, there were lighter moments during the ordeal. When the plane landed in the water, he dialed his airline office on his mobile phone, and told the person who answered that the plane was down, he said. He said the staffer was in obvious high state of agitation, and could only blurt into the phone, “I can’t talk to you now. We have a plane down in the Hudson River.” The GAC will continue until Wednesday.

CUNA warns ad rule change could have consequences

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WASHINGTON (3/1/11)--The additional cost of complying with the National Credit Union Administration's (NCUA) proposed changes to advertising requirements could force some credit unions to reduce or eliminate some of their current marketing practices, the Credit Union National Association (CUNA) said in a recent comment letter. The NCUA at its December meeting approved a proposed rule that extends the NCUA's official advertising statement rule to all radio and television advertisements, annual reports, and statements of condition. In addition, for print advertisements, the official advertising statement must be “no smaller than the smallest font size used in other portions of the advertisement intended to convey information to the consumer.” NCUA board member Gigi Hyland was the lone dissenting vote and expressed concerns over the additional costs and totality of regulatory burdens for credit unions. NCUA board member Gigi Hyland was the lone dissenting vote and expressed concerns over the additional costs and totality of regulatory burdens for credit unions. Radio and television advertisements that are under 30 seconds long were previously exempted from including the NCUA's advertising statement requirement. "While we fully support appropriate, effective disclosure aimed at informing and protecting consumers, we strongly oppose many of the board's proposed changes and believe they will have negative unintended consequences if adopted as proposed," the CUNA letter said. The NCUA has claimed that adding additional disclaimers to these ads would increase consumer confidence, but CUNA noted that the NCUA statement could be "ineffective" and could "cause confusion and lead to a decrease in consumer confidence." CUNA said that additional disclosures may be ineffective because many consumers are not aware of the NCUA, and added that the burden of educating consumers about the agency should be "properly placed on NCUA and not individual credit unions." One credit union representative cited in the letter said that the NCUA disclaimer, which lasts for two seconds of a standard 30-second radio ad, cost the credit union over $3,100 last year. Revising and re-recording portions of existing ads to add the NCUA disclaimer would cost an additional $1,000, the representative said. For the full comment letter, use the resource link.

Treasury official thanks CUs for helping working families

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WASHINGTON (3/1/11)--Speaking before the Credit Union National Association’s (CUNA) 2011 Governmental Affairs Conference, U.S. Treasury Undersecretary Jeffrey Goldstein thanked credit unions for providing working families with access to critical financial services, noting that those who lack access to credit unions are often forced into using higher-cost financial options. The Treasury official also praised credit unions for working with the Treasury on several key initiatives. One such initiative was the development of the Obama administration’s housing market reform plan, and Goldstein noted that CUNA was one of many groups that met with administration officials as they developed their plan. The Obama administration last month proposed nearly eliminating the government's role in the mortgage market as one of several solutions to the current predicament caused by the government's 2008 conservatorship of mortgage market entities Fannie Mae and Freddie Mac. The administration has also proposed limiting the government's intervention in the mortgage market to times of financial distress and using a system of reinsurance to backstop private mortgage guarantors to a targeted range of mortgages. Goldstein said that the administration would proceed carefully and balance the pace of housing finance reform with the pace of market recovery. A vital part of these reforms is ensuring that credit unions have much needed access to the secondary mortgage market, Goldstein added. He added that the administration is committed to allowing the private market to serve as the main source of mortgage credit.

Senate Banking head credits CU loyalty during crisis

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WASHINGTON (3/1/11)--Credit unions have faced their own share of difficulties during the recent economic crisis, but stayed loyal to the communities they serve and their membership throughout their financial troubles, Senate Banking Chair Tim Johnson (D-S.D.) said in remarks made on Monday. In a pre-taped message delivered to the Credit Union National Association's 2011 Governmental Affairs Conference, Johnson said that credit unions are an essential part of the economy, and added that special care was taken to ensure that credit unions were treated fairly as the Dodd-Frank financial regulatory package was developed last year. Johnson pledged to continue to monitor Dodd-Frank's impact on credit unions as portions of the legislation continue to be implemented. Johnson closed by saying that he has enjoyed working with credit unions, and encouraged credit unions to continue to inform him on how he can help them fulfill their mission. In related news, Johnson and his colleague Sen. Thad Cochran will soon introduce a Senate resolution that would name 2011 as the international year of cooperatives.

Matz Aggressive actions saved CUs from 1.5B loss

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WASHINGTON (3/1/11)--Though some of the National Credit Union Administration’s (NCUA) recent regulatory actions did not help the agency win "any popularity contests" with credit unions, NCUA Chairman Debbie Matz has said that those actions saved the credit union system from $1.5 billion in total losses.
Click to view larger image NCUA Chairman Debbie Matz told credit union representatives at CUNA's GAC that while some recent regulatory actions may not have won the agency "any popularity contests" among credit unions, failing to act would have meant dozens of high-profile failures. (CUNA Photo)
Matz made her remarks before the Credit Union National Association’s 2011 Governmental Affairs Conference Monday, and she was followed on the program by fellow board member Michael Fryzel. NCUA board member Gigi Hyland is scheduled to speak at the GAC on Wednesday morning. Matz cited the NCUA’s decision to increase administrative actions on some troubled credit unions and to ramp up its examination frequency from once every 18 months to once a year as the type of “tough love” that helped the credit union system continue to move forward in troubled economic times. The agency also "used very prescriptive Letters of Understanding and Agreement to commit certain credit unions to specific performance targets with very close supervision" and worked to find merger partners for troubled credit unions “that simply could not survive on their own," Matz added. The NCUA also worked to find new leadership for troubled credit unions and temporarily conserved some credit unions to help stabilize them in tough times, she said. This type of aggressive regulation reduced the total number of 2010 natural person credit union failures to 28 and dropped the total amount of related losses to $221 million, Matz said. These losses were five times lower than the losses incurred by the banking industry during that same period, Matz added. “For most credit unions, there is no need to fear a tough regulator. In fact, a tough regulator can protect you,” she said. Matz also made the case for continued strong regulation going forward and said that she would rather the NCUA “be tough today” than “fail to prevent catastrophe tomorrow.” Legislators should also do their part to ensure the continued health of the credit union system by allowing credit unions to raise supplemental capital and by lifting the current 12.25% of assets cap on credit union member business lending, Matz said. Matz’s NCUA colleague Michael Fryzel emphasized the importance of direct contact with legislators in remarks delivered later in the day. Fryzel said that members of Congress must constantly be reminded of all the good things that credit unions do, and that credit unions are the financial services provider for 90 million Americans. The face-to-face contact that credit union representatives make with their legislators during this year's GAC will be felt by the credit union system for years to come, Fryzel added. Overall, credit unions now should focus on putting in the work needed to keep the credit union movement going for the next generation and concentrate on growth, learn lessons, and "make acts, large and small, every day, to move forward," Fryzel said. "If we continue to think of ourselves as a cooperative movement, as a selfless effort for the benefit of members, people will use us in even greater numbers, and our problems will fade as we grow," he added.

Inside Washington (02/28/2011)

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* WASHINGTON (3/1/11)--A U.S. Treasury Department official said recently that while new financial regulations can help decrease the impact of a future financial crisis, they cannot prevent its occurrence. David Miller, chief investment officer for Treasury's Office of Financial Stability, called it “folly” to think a future crisis can be avoided or that threat of a future recession can be eliminated. Miller’s division oversees the Troubled Asset Relief Program (American Banker Feb. 28) … * WASHINGTON (3/1/11)--Representatives from the finance industry and D.C.-based think tanks will testify alongside Credit Union National Association (CUNA) President/CEO Bill Cheney at a Wednesday hearing on the Dodd-Frank Act’s impact on credit unions, small financial institutions, and other small businesses. In a Monday statement, House financial institutions and consumer credit subcommittee leader Rep. Shelley Moore Capito (R-W. Va.) noted that she is hearing “concerns from small institutions about the unintended consequences that could adversely affect them.” Capito said that the Wednesday hearing will give small issuers and small businesses alike a chance to shed some light on how Dodd-Frank implementation is impacting their business practices. The hearing will start at 2 p.m. (ET) ...

Game Change authors offer political insights

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WASHINGTON (3/1/11)--President Barack Obama needs to move toward the political center to get re-elected, but Republicans still must broaden their appeal to Hispanic and younger voters to make it a close race: So say two of the nation’s top political reporters, Mark Halperin and John Heilemann. Halperin and Heilemann, authors of “Game Change,” a best-selling book on the 2008 presidential election, were among the speakers during the Monday sessions of the Credit Union National Association’s Government Affairs Conference, held here through Wednesday. Heilemann said Obama was elected with a campaign that appealed to all voters, but has ended up governing in a more partisan way. He added, "The president also proved to be less of a communicator." Heilemann said that when Republican Scott Brown stunned Democrats by winning the seat so long held by Democrat Sen. Edward Kennedy of Massachusetts, Obama’s advisers urged him to begin adjusting his strategy. Co-author Halperin told the audience he questions whether Republicans can take advantage of Obama’s vulnerability in 2012. Halperin said despite political problems, Obama remains a charismatic and skilled politician. He said so far, there is no Republican frontrunner with comparable political talent.