Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

Washington Archive

Washington

CUNA seeks comment on CFPB remittance changes

 Permanent link
WASHINGTON (3/2/12)--Credit unions can provide their own insights on how the Consumer Financial Protection Bureau's (CFPB) recently released remittance rule would impact their practices, and how compliance burdens caused by the rule could be mitigated, in a new Credit Union National Association (CUNA)  comment call.

The CFPB has issued a proposal to further define certain aspects of the "remittance transfers" final rule under Regulation E, as required by the Dodd-Frank Act. The final rule's requirements will apply to most credit unions and financial institutions that provide consumers with international electronic funds transfer services because it broadly defines the term "remittance transfers" to include virtually all cross-border electronic funds transfers initiated by consumers in the U.S. including Automated Clearinghouse and wire transfers, and products such as the World Council of Credit Unions' IRnet.

The final rule does not apply to most transfers involving credit, debit, and prepaid cards.

The CFPB has also asked for comment on:
  • Whether to provide a safe harbor to exempt certain financial institutions and other "remittance transfer providers" from the final rule if they transmit a low number of transfers (e.g., 25 transfers per year); and
  • For transfers scheduled in advance, including preauthorized transfers, whether to provide additional flexibility on the required disclosures, including: additional use of estimates for a scheduled one time or first transfer in a series of preauthorized transfers; a longer timeframe for or the elimination of the pre-payment disclosure for subsequent transfers; and other potential changes to the cancellation requirements.

The CFPB expects to complete any further rulemaking on these issues before the final rule becomes effective on Feb. 7, 2013.

Comments on the proposal are due to CFPB by April 9. CUNA will accept comments until March 26.

For the full comment call, use the resource link.

Nearly 400M in funds requested from 2012 CDFI Fund

 Permanent link
WASHINGTON (3/2/12)--A total of 44 credit unions have applied for a combined $59 million in funding during the 2012 round of the U.S. Treasury Department's Community Development Financial Institutions (CDFI) Fund.

Twenty-four of those credit unions applied for technical assistance (TA)  grants. Twenty applied for financial assistance (FA) grants.

In total, 403 credit unions, banks, loan funds, venture capital funds, thrifts, and holding companies applied for the $123 million in funds that will be disbursed this year.  The FY 2012 applicants requested almost $395.7 million, with FA applicants requesting $384.3 million and TA applicants requesting $11.4 million. Applicants for FA are from 46 states plus the District of Columbia and Puerto Rico; TA applicants are from 38 states plus the District of Columbia and Puerto Rico.

A total of 393 institutions applied for funding during last year's round.

CDFI Fund Director Donna Gambrell said "the response to this year's round demonstrates that there is still work to be done in many communities across our nation and that there is continued need for the flexible capital that the CDFI Program provides. These CDFIs are on the frontlines of these economically distressed communities, and are providing critically needed financial products and services to those who often have no alternatives."

The Treasury's CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit. Credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding to help maintain their credit union's presence in the community. CDFI fund distributions are merit-based.

The fund awarded $142,302,667 to 155 institutions, including 25 credit unions, last year, in the largest single round of monetary awards since the CDFI Fund program began in 1994.

The CDFI Fund eclipsed $1 billion in total awards in 2011.

This year's recipients will be announced in the summer, the release said.

For the CDFI Fund release, use the resource link.

Inside Washington (03/01/2012)

 Permanent link
  • WASHINGTON (3/2/12)--The Credit Union National Association (CUNA) has named former Capitol Hill staffer Sam Whitfield to serve as its new vice president of legislative affairs. Whitfield, a native Mississippian with a BS from the University of Mississippi, has previously worked on Sen. Trent Lott's (R-Miss.) staff, in the senator's roles as both Senate majority leader and Republican leader. He also served President George W. Bush's administration as a legislative analyst/public affairs specialist with the White House Office of National Drug Policy, and worked as a press officer for the Coalition Provisional Authority in Baghdad, Iraq. He most recently served as a legislative representative for the National Association of Realtors. Whitfield's primary role will be to manage the association's team of congressional advocates and their efforts to execute credit union/CUNA strategies on Capitol Hill. Whitfield takes on a position that was formerly held by CUNA Senior Vice President of Legislative Affairs Ryan Donovan, who now leads the association's advocacy efforts with Congress. John Magill, CUNA executive vice president and special assistant to the president, will continue his role as the association's chief lobbyist on Capitol Hill as well as providing high-level strategic counsel to CUNA President/CEO Bill Cheney. Cheney said "Sam's broad experience on the Hill and in government, as well as his effectiveness as an advocate, will serve credit unions well in his new role with us." …
  • WASHINGTON (3/2/12)--U.S. regulators are unlikely to make the July 21 deadline to finalize a rule that would ban proprietary trading by banks and limit their investments in private equity and hedge funds, Federal Reserve Chairman Ben Bernanke told Congress Wednesday (American Banker March 1). The deadline to finalize the so-called Volcker Rule is July 21. Bernanke told the House Financial Services Committee he couldn't provide an exact date when the rule would be finalized. The Fed has received about 17,500 comments on the rule, which has received criticism from banks and foreign governments. Concerns are primarily related to the exceptions the rule allows. Banks would be permitted to make certain kinds of trades, including those for market-making activities. Bernanke said regulators are having difficulty distinguishing between proprietary trading and market-making activities …
  • WASHINGTON (3/2/12)--In a new Securities and Exchange Commission filing, Fannie Mae said it cancelled Bank of America's (BofA) loan delivery contract. The cancellation bars BofA from selling most types of loans to Fannie because of delays by the bank in making good on outstanding buyback requests (American Banker March 1). BofA accounted for 59% of buyback requests that were more than 120 days past due, Fannie said in the filing. Last week, BofA announced it would stop selling purchase money loans made to Fannie Mae. Although BofA has yet to honor its repurchase obligations, Fannie has not changed the amount it expects to collect from them, the government-sponsored enterprise said, adding that it will continue to work with the bank to resolve the issues …

CFPB accepting more consumer complaints

 Permanent link
WASHINGTON (3/2/12)--Consumers can forward their issues and complaints regarding checking and savings accounts to the Consumer Financial Protection Bureau (CFPB), under an initiative announced Thursday by the bureau.

The CFPB plans to have comment systems set up for comments and complaints on all consumer financial products and services by the end of 2012. The bureau currently also  accepts complaints related to credit cards, mortgages, and other home loans.

CFPB Director Richard Cordray said in a blog post announcing the new comment initiative that collecting consumer complaints on checking and savings accounts "is an important step" for the agency.

"We have heard story after story of consumers being hit with fees they did not expect and do not understand. We take these complaints very seriously," he added.

Cordray said that financial institutions will be expected to respond to checking and savings account consumer complaints within 15 days. They must resolve the issue within 60 days. Consumers will be able to monitor the status of their complaint on the CFPB's homepage. During a recent conference call in which CUNA staff participated, CFPB officials confirmed that complaints received outside of the CFPB's direct examination and supervision authority are transferred to the appropriate prudential regulators for processing.

Regarding other consumer complaints, the CFPB's Consumer Response team had received nearly 12,000 credit card complaints and 7,000 mortgage complaints as of Feb. 22. 

Cordray said the credit card complaints have focused on three issues: consumer confusion, third-party fraud, and factual disputes between the consumer and the card issuer. Most mortgage complaints have been tied to foreclosure issues.

For the full CFPB blog, use the resource link.

2011 CU membership growth impressive Cheney says

 Permanent link
ALEXANDRIA, Va. (3/2/12)--The number of credit union memberships nationwide grew to 91.8 million in the fourth quarter of 2011, the National Credit Union Administration (NCUA) reported, setting a new historical high to end a year that saw many move their money from larger banks into credit unions on Bank Transfer Day.

Credit union membership increased by 398,000 in the fourth quarter of 2011, and 1.3 million over the course of the year, the NCUA added in its analysis of the call report data submitted by the nation's 7,094 federally insured credit unions.

Credit Union National Association (CUNA) President/CEO Bill Cheney said the NCUA numbers demonstrated "very impressive membership growth for credit unions," and added that the large increase in members in the fourth quarter "is very positive compared to declines in prior years."

Net worth and assets both climbed when compared to 2010 fourth quarter results, increasing by 6.9% and 5.2%, respectively. Credit union net worth totaled $98.4 billion as of Dec. 31, and credit unions held $961.8 billion in assets as of that date. The credit union industry's return on assets (ROA) ratio, a measure of earnings, also increased over 2010's total, standing at 68 basis points (bp) as of Dec. 31. The NCUA noted that credit union industry ROA has increased by 50 bp since December 2009.

NCUA Chairman Debbie Matz noted "credit unions ended 2011 in a safer and stronger position than at the start of the year," as net income increased by 41.2% over 2010's total, finishing the year at $6.4 billion.

The NCUA also reported the following results between the fourth quarters of 2010 and 2011:

  • Shares increased 5.2% to $827.4 billion from $786.4 billion;
  • Investments, cash on deposit, and cash equivalents increased 12.4% to $352.1 billion from $313.3 billion; and
  • Loans increased 1.2% to $571.5 billion from $564.7 billion.
"Credit unions' net income and other growth numbers reinforce that new safety and soundness  rules are not needed, certainly, for the vast majority of credit unions," CUNA Deputy General Counsel Mary Dunn  said.

For more on the NCUA's fourth quarter credit union statistics, use the resource link.

CFPB-NCUA webinar now available online

 Permanent link

ALEXANDRIA, Va. (3/2/12)--The free joint Town Hall session with National Credit Union Administration (NCUA) Chairman Debbie Matz and Consumer Financial Protection Bureau (CFPB) Director Richard Cordray is now available online.

The 90-minute, Feb. 8 session discussed such topics as overdraft protection programs, which the CFPB director acknowledged are on the bureau's radar screen, and credit card disclosures. From the NCUA side, the session covered new rules on credit union service organizations and trouble debt restructuring loans, among other issues.

To access the archived version of the webinar, use the resource link below.

Big bank fees back in the news

 Permanent link
WASHINGTON (3/2/12)--Big banks' growing fees is a topic that is back in the news this week, with The Wall Street Journal zeroing in on a Bank of America (BofA) plan to add a new string of fees and The Huffington Post highlighting recent fee-celebrating comments by a JP Morgan Chase official.

In its March 1 issue, the Journal reported that BofA is considering new monthly fees that range from $6 to $25. The article said the new line of fees would be targeted primarily to basic-checking accountholders, unless they agree to "bank online, buy more products or maintain certain balances."

Reporters Dan Fitzpatrick and David Enrich wrote, "Those efforts are tricky, because they risk upsetting the banks' best customers or drawing fire from politicians. Bank of America retreated last fall from a new $5 debit-card charge following a customer revolt and a wave of criticism."

It was that $5 debit-card fee that many see as the spark that ignited the grassroots Bank Transfer Day (BTD) movement, where a social media post by Kristen Christian transmogrified into a mass movement of consumers away from big banks and toward smaller financial institutions, like credit unions and community banks.

Also in the news, The Huffington Post, picking up a New York Times live blog post from the bank's investor day conference, reported that the head of JP Morgan Chase's consumer banking division, Todd Maclin, said he would "celebrate" if the bank could charge even higher fees.

According to the Thursday article, JP Morgan is itching for a time when consumers begin to view maintenance fees for checking the way they see items on their monthly household budgets--like gym memberships.

The Post went on to say that while the banking industry defends its fees by saying it costs a lot to maintain and service checking accounts, it highlights the fact that small institutions, like credit unions, "are doing just fine with middle-class customers who have less than one hundred grand in the banks--and they don't need to charge fees to do it."

Eighty percent of credit unions, in fact, offer free checking accounts, the Post reports, quoting CUNA figures.

NEW Federally insured CUs enjoy new membership highs NCUA says

 Permanent link
ALEXANDRIA, Va. (UPDATED: 12:35 p.m. ET, 3/1/12)--The number of credit union memberships nationwide grew to 91.8 million in the fourth quarter of 2011, the National Credit Union Administration (NCUA) reported, setting a new historical high to end a year that saw many move their money from larger banks into credit unions on Bank Transfer Day.

Credit union membership increased by 398,000 in the fourth quarter of 2011, and 1.3 million over the course of the year, the NCUA added in its analysis of the call report data submitted by the nation's 7,094 federally insured credit unions.

NCUA Chairman Debbie Matz noted "credit unions ended 2011 in a safer and stronger position than at the start of the year," as net income increased by 41.2% over 2010's total, finishing the year at $6.4 billion.

The NCUA also reported the following results between the fourth quarters of 2010 and 2011:
  • Net worth increased 6.9 percent to $98.4 billion from $92.0 billion;
  • Assets increased 5.2 percent to $961.8 billion from $914.3 billion;
  • Shares increased 5.2 percent to $827.4 billion from $786.4 billion;
  • Investments, cash on deposit, and cash equivalents increased 12.4 percent to $352.1 billion from $313.3 billion; and
  • Loans increased 1.2 percent to $571.5 billion from $564.7 billion.
For more on the NCUA's fourth quarter credit union statistics, use the resource link.