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CFPB wants credit scores more available to consumers

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WASHINGTON (2/28/14)--In remarks to his agency's Consumer Advisory Board Thursday, Consumer Financial Protection Bureau Director Richard Cordray underscored the important role credit reports play in every consumer's financial affairs.
 
Whether they are aware of it or not, Cordray said, people's ability to access credit, and how much they pay for credit, is typically governed by what is contained in their credit profiles.
 
"We are all here," he told the CAB members, "because we care deeply about how people are being treated in the consumer financial marketplace," including the credit reporting industry.
 
Earlier in the day, the CFPB called on the nation's top credit card companies to make credit scores and related content freely available to their customers. The CFPB also released a new study that found accuracy issues top the list of credit reporting complaints it receives from consumers (see resource link for the report).
 
Cordray said that, going forward, the bureau will be seeking to make credit reporting fairer for consumers by exercising its supervisory authority over larger credit reporting companies and many of their largest furnishers. 
 
"Our examination teams ensure that they are complying with the consumer financial laws.  We now oversee companies that account for about 90% of the annual receipts in this market. 
 
"This oversight allows us to step behind the curtain of these companies and their internal processes," he said, adding, "We then can find specific pain points for consumers, identify problem areas, and work directly to improve their responsiveness to consumer problems.  Our supervisory authority extends to the largest financial institutions and collections agencies, which provide a majority of the credit reporting companies' trade lines and collection items."

CUNA letter thanks Camp for helping CUs follow their mission

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WASHINGTON (2/28/14)--Allowing credit unions to retain their federal income tax exemption enables the financial cooperatives to fulfill their mission to "promote thrift and to provide access to credit for provident purposes to members." That is one of the key points made by Credit Union National Association President/CEO Bill Cheney in a Thursday letter thanking House Ways and Means Committee Chairman Dave Camp (R-Mich.) for his treatment of credit unions in his comprehensive tax reform discussion draft released a day earlier.
 
As clarified by CUNA just hours after the reform draft was released, the specific credit union tax status is left untouched in the tax reform plan, and staff of the tax writing committee stated to CUNA that the proposal has "no intention of imposing any additional taxes on credit unions."
 
Cheney was quickly able to call the proposal "a big win for credit unions in that it makes no changes to our tax status," particularly notable when so many others could face major hits under the reform plan.
 
"The proposed bill is the outcome of the months of challenging, unrelenting work by credit unions and state leagues--and our support for the measure is our way of showing our gratitude to Chairman Camp for listening to us," he said.
 
In his Thursday letter to Camp, Cheney wrote that "the benefits that Americans--those who are credit union members as well as those who use other financial institutions--receive as a result of credit unions' employment of the tax exemption are substantially greater than the cost of the exemption to the government."
 
"The credit union tax exemption is a good deal for all Americans, and one of the best investments in its citizenry that the government makes," Cheney underscored in his thanks.
 
The CUNA letter commended Camp's leadership in the tax reform process, which Cheney acknowledged will be a "long and challenging" process. CUNA looks forward to working with the chairman and his staff as they move forward, the group's CEO said.
 

Importance of BSA compliance is topic of new NCUA webinar

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ALEXANDRIA, Va. (2/28/14)--"BSA-MSB Training: What You Need to Know" is the topic of a newly announced National Credit Union Administration webinar scheduled for Wednesday, March 19, at 2 p.m. (ET).

The session is geared to credit union managers and compliance staff. In its announcement the NCUA reminds that the importance of Bank Secrecy Act (BSA) compliance cannot be overstated. "An insufficient BSA compliance program may expose a credit union to reputation risk, such as manipulation by unscrupulous money launderers, undermine the integrity of the financial system or even threaten national security," it says.

Diane Rector, training manager and economic development specialist supervisor with the NCUA's Office of Small Credit Union Initiatives, will host the session. Jane Pannier, senior vice president and in-house counsel for Neighbor Bench, LLC, and Judy Graham, program officer with the NCUA's Office of Examination and Insurance will be on the panel. Key areas that will be discussed include:
  •     Critical elements of a BSA program;
  •     Money Service Businesses (MSBs);
  •     Common BSA violations; and
  •     Reporting requirements.
A certificate of training will be given to attendees who successfully complete the test offered at the end of the webinar.

Credit unions can use the resource link below to register for this free webinar is open. The same link will be used to log into the webinar on March 19. Registrants should allow pop-ups from this website.

The Credit Union National Association offers a four-day BSA compliance conference. CUNA's 10th annual event will bring together BSA compliance officers, state and federal examiners, industry experts and regulators for discussion, networking and education on BSA compliance issues.

This annual conference covers all of the BSA statutory and regulatory training requirements that compliance professionals need in order to comprehend and comply with the complex federal BSA law and also offers BSA training certification.

The 2014 conference is Oct. 26-29 in Las Vegas. (See second resource link for more detail.)

House votes to increase FSOC authority to overturn CFPB rules

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WASHINGTON (2/28/14)--In a 232-182 vote, the U.S. House passed The Consumer Financial Protection Safety and Soundness Improvement Act (H.R. 3193), which provides greater authority to the Financial Stability Oversight Council (FSOC) to stay or set aside rules promulgated by the CFPB if they would have an adverse impact on the safe and sound operations of financial institutions. 

The bill lowers this voting threshold from the current 2/3 vote requirement of the council to a majority vote in order to take this action.
 
The Credit Union National Association has called the bill a step in the right direction because it would help to assure credit unions--and other entities--already subject to considerable regulation are not unnecessarily burdened.

The bill also requires the CFPB to take into consideration the impact of its rules on insured depository institutions, change the bureau's leadership structure from a single director to a five-member panel, and make some operational changes.
 
 

CUs blanket halls of Congress with advocacy strength

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WASHINGTON (2/28/14)--With a record 4,400-plus attendees at this year's Credit Union National Association Governmental Affairs Conference, the action during Capitol Hill advocacy visits was intense. Credit union league representatives led credit union reps to meet with Republicans and Democrats alike, long-term lawmakers and those new to Washington, legislators who "get" credit unions and those who still have a lot to learn.  In each meeting, the credit union folks defended the credit union tax status and advocated for key initiatives.
Click for slide show CUNA President/CEO Bill Cheney thanks credit union representatives in the halls of the House and Senate office buildings for their contributions to the days of advocacy surrounding CUNA's Governmental Affairs conference. Here, Cheney (right) shakes the hands of Virginia credit union representatives after a Virginia Credit Union League luncheon with legislators on Capitol Hill. (CUNA Photo)
Credit union representatives were everywhere on Wednesday and Thursday, hitting on all the major points: Taxation, member business lending, housing finance reform, data security and credit union charter enhancements.

CUNA's annual event remains a valuable touch point for meeting face to face with lawmakers, California and Nevada Credit Union Leagues President/CEO Diana Dykstra said. She led more than 200 representatives from those states on their hikes, and lauded member credit unions' efforts in supporting the "Don't Tax My Credit Union" campaign which was kicked off last year by CUNA and state credit union leagues.

Bobby Michael, CEO of Statesboro, Ga.'s Core CU, said he was most focused on just getting the credit union message out to legislators. "If you repeat it enough times it sinks in," he said.

Alabama and Florida credit unions made 36 lawmaker visits over about eight hours Wednesday, the League of Southeastern Credit Unions reported. Data security and tax reform were the most widely discussed issues. Most lawmakers were familiar with credit union concerns regarding data security, though some were surprised that merchants were not accountable financially or that credit unions can't let their members know the name of the business that has been breached, LSCU said.

Data security was a top topic when a crew of Vermont credit union leaders met with Sen. Pat Leahy (D-Vt.). Association of Vermont Credit Unions President/CEO Joseph Bergeron said credit unions in his state had just received a second round of threatening letters from the same patent trolls that struck two years ago, and Bergeron thanked Leahy for his work to address the patent troll issue.

Northwest Credit Union Association Senior Vice President for Advocacy Jennifer Wagner said the time credit unions have with their elected leaders can be brief, so the message points "have to be prepared, concise and specific to the person we're meeting with."

More than 100 credit union advocates from North and South Carolina took the credit union message to their legislators on Wednesday, and the Carolinas Credit Union League said those advocates can return home confident in the results of their unified voice and fully aware of the effectiveness in a clear message.

Some credit union groups also took the time to address issues unique to their state. South Dakota credit union advocates opened their discussions by addressing the attacks banks are making against them. The credit union representatives stressed the value of the credit union model in the marketplace and the importance of preserving the credit union tax status, and many shared individual stories about how the tax status still serves the purpose in their communities and how the credit union tax status is good public policy.

May 28 is comment deadline on NCUA risk-based capital plan

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WASHINGTON (2/28/14)--May 28 is the public comment deadline for the risk-based capital plan proposed by the National Credit Union Administration earlier this month, according to a document publish Thursday in the Federal Register .

The Credit Union National Association urges credit unions to weigh in on the proposal and let regulators know their concerns regarding the risk-based approach to capital.

CUNA, as reported, has also encouraged the agency to hold public hearings that, in combination with the important step of comment letters, it says will produce an official record of discussions between credit unions and NCUA leadership that could do much to assist the NCUA board in determining the best path for proceeding on the rule.

CUNA supports a modern risk-based capital system for credit unions--in fact, CUNA President/CEO Bill Cheney declare that from the podium in front of 4,400 credit union advocates here this week for the association's 2014 Governmental Affairs Conference.

"What we don't support is layering additional capital requirements on top of our one-size-fits-all outdated system of prompt corrective action," he said.

CUNA has also voice concerns about credit unions' capital buffers. The association has executed a detailed analysis that indicates the proposed risk-based capital rule would require credit unions to add a combined $10.5 billion to their capital just to maintain the levels that they have now to retain current margins above proposed "well capitalized" thresholds CUNA has produced an "Inside Exchange" video segment on the steps for writing an effective comment letter on this issue. (See resource link.)

CUNA executive committee presses RBC proposal concerns with NCUA chairman

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WASHINGTON (2/28/14)--Following up on concerns voiced by credit unions at the Credit Union National Association's Governmental Affairs Conference (GAC) here this week, CUNA's Executive Committee and key senior staff discussed the National Credit Union Administration's risk-based capital (RBC) plan with agency chairman Debbie Matz and senior NCUA staff. The meeting also addressed other key areas of credit union concerns.

"This meeting afforded the group an important opportunity to raise directly to the chairman and her top staff the range of concerns that have already surfaced regarding the proposed capital rule," said CUNA Deputy General Counsel Mary Dunn, following the meeting.

The CUNA group focused on concerns, such as:
  • Whether the proposal is needed;
  • Various provisions in the proposal, such as authority for the agency to impose higher capital requirements on a case-by-case basis; and
  • A number of the risk weightings and directives regarding the calculation of the proposed risk-based capital ratio. 
"Credit unions have zeroed in on the exclusion of the National Credit Union Share Insurance Fund 1% deposit and goodwill in calculating the RBC ratio under the proposal. The need for legislative authority for supplemental capital and prompt corrective active reform was also highlighted in this meeting," Dunn reported.

The discussion of risk-based capital with Matz reflected concerns raised by credit union officials at the special session on the proposal held by CUNA held Sunday, Feb. 23, at the GAC.  It is estimated that 450 credit union officials attended the standing-room-only session.

At the follow-up meeting with NCUA, CUNA also discussed the need for meaningful regulatory relief, data security changes and examination concerns. The group raised issues regarding the agency's growing budget, which now stands at $268 million, and is almost exclusively funded by credit unions.
 
The agency was commended by the group for its announcement prior to the GAC that future Temporary Corporate Credit Union Stabilization Fund assessments are unlikely, as well as the highly successful efforts of the agency to pursue legal claims against large banking institutions that sold mortgage-backed securities to the five corporate credit unions that were taken over by NCUA in 2009.

Use the resource links to access CUNA's range of resources to help credit unions understand the impact of the RBC proposal on their operations.

NFIP vote moves to next week

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WASHINGTON (2/28/14)--Progress in the House on legislation to enact reforms to the National Flood Insurance Program (NFIP) has slowed a little due to some very technical issues that House leadership hopes to have resolved soon.  A vote expected this week now is expected to be on next week's House floor agenda.
 
The key provision of the bill would delay planned increases in flood insurance premiums until the Federal Emergency Management Agency puts in place a plan to ensure they are implemented affordably. (See resource link to read more on other provisions.)
 
Last month, the Senate passed similar legislation, the Homeowner Flood Insurance Affordability Act, with bipartisan support and the House is expected to do the same.