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Cheney: Privacy Bill Passage Would Eliminate Needless Burden On CUs

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WASHINGTON (3/11/13)--H.R. 749, the Eliminate Privacy Notice Confusion Act, is scheduled for a full U.S. House Tuesday. The House on Friday announced that the item is on its suspension calendar for that day.

The Credit Union National Association supports the bill, which would eliminate repetitive privacy notices by eliminating a requirement that the notices be sent annually. Under the terms of the bill, privacy notices would only to be sent when the privacy policy of a financial institution has changed. Citing statistics that showed more consumers would read privacy notices if they were sent only when account terms changed, CUNA President/CEO Bill Cheney called on Congress to eliminate repetitive, annual privacy notices by passing H.R.749.

Reps. Blaine Luetkemeyer (R-Mo.) and Brad Sherman (D-Calif.) introduced the bill earlier this year, and the bill has 48 co-sponsors. The bill is identical to legislation that unanimously passed the House before the 112th Congress adjourned. The Senate, however, did not act on the bill in time.

Under current rules, credit unions alone have sent an estimated one billion annual privacy notifications to members since 2001, CUNA estimates. CUNA President/CEO Bill Cheney in a letter to lawmakers noted a survey that shows fewer than one-quarter of consumers read the privacy notifications they receive, and over three-quarters of consumers would be more likely to read them if they were only sent when the financial institution changed its policy.

"This suggests that the public policy goal of privacy notifications would be better achieved if the notices had more meaning to consumers." H.R. 749 achieves this end, Cheney wrote.

CU Rep Joins Philly Fed Advisory Council

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WASHINGTON (3/11/13)--Gregory A. Smith, president/CEO of Pennsylvania State Employees CU, Harrisburg, Pa., will join the 12-member Federal Reserve Bank of Philadelphia's Community Depository Institution Advisory Council (CDIAC) in 2013.

Smith began his credit union career with Torrey Pines FCU, San Diego, Calif., in 1972, and has also worked with Western Corporate FCU, San Dimas, Calif.; Orange County's CU, Santa Ana, Calif.; Teachers FCU, Long Island, N.Y.; and Michigan State University EFCU, East Lansing, Mich. Smith is a member of the Pennsylvania Credit Union Association's State Credit Union Advisory and Regulatory Review committees. He is also active in the association's Governmental Affairs Committee.

There are 12 CDIAC groups nationwide, with each group representing one Federal Reserve district. The district CDIACs are comprised of representatives from commercial banks, thrifts and credit unions with assets of $10 billion or less.

Philadelphia Fed CDIAC members are drawn from eastern Pennsylvania, southern New Jersey, and Delaware.

The councils provide input to the Fed on the economy, lending conditions and other issues. The Fed selects one member from each of its 12 Fed local advisory councils to serve on the full CDIAC, and the council meets with the Fed in Washington, D.C., twice each year.

Sunday Wash Post Spotlights Tax Reform's Momentum

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WASHINGTON (3/11/13)-A front-page, tax-reform story in the Sunday edition of The Washington Post did not break any new ground or pose any specific threats to credit unions, but what it did do, said the Credit Union National Association's top legislative affairs officer, is underscore that the looming tax battle has to remain the number one action target for CUNA, the state credit union leagues and credit unions.

The article, 'Lobbyists Gird For Looming Tax Battle,' noted, "momentum has quietly been building toward a once-in-a-generation push to overhaul federal taxes, an effort that would likely affect nearly every family and business."

It continued, every industry, "(f)rom corporate chiefs and hedge fund lobbyists to Montana ranchers and Broadway producers," are trooping up to Capitol Hill to press their agenda.

CUNA's John Magill, executive vice president of government affairs, said that CUNA's work to educate lawmakers and the public about the public policy value of the credit union tax status is a top priority.

"Absolutely everything in the tax code could fall under the microscope of those policy makers charged with developing tax reform.  No legislator CUNA has spoken with has suggested that the credit union tax status is currently on the table as a tax reform or spending issue.

"However," Magill emphasized, "we know that an educated Congress, and an educated public, are the credit union movement's best tools to work to keep it that way."

He encouraged credit unions to continue their conversations with lawmakers and to engage their members as well by using a Tax Status Advocacy Toolkit provided by CUNA and the leagues.

"CUNA's research shows that when members understand the value of membership, they will stand with us to defend the exemption. We have to work together to communicate the value proposition of credit union membership to them." (See the resource link.)

Under the Federal Credit Union Act, federal and state-chartered credit unions are exempt from federal income tax because they are cooperatives operated for and by their members, and because credit union shares are essentially members' deposits. The tax status has been re-affirmed periodically by the U.S. Congress and is supported by many lawmakers. Under the act, credit unions have a statutory mission to promote thrift and provide credit for provident purposes to their members.

Credit unions pass on their tax savings to their taxpaying members/owners in the form of dividends or their fee structure and rates on savings and loans--a value that adds up to $5.8 billion annually.

The tax article also appeared on the  Use the resource link.

FASB Changes, CFPB Agenda Detailed In CUNA Audio Conference: Part 2

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WASHINGTON (3/11/13)--The Credit Union National Association last week reiterated there is growing anxiety about the Financial Accounting Standards Board's (FASB) proposal regarding financial reporting of expected credit losses on loans and other financial assets. CUNA Deputy General Counsel Mary Dunn said CUNA is addressing these issues head on, and will meet with FASB officials in mid-March.

During a Thursday CUNA "Pressing Regulatory and Compliance Issues Audio Conference," free to CUNA-affiliated credit unions and leagues, CUNA Senior Assistant General Counsel for Regulatory Advocacy Luke Martone noted that FASB's proposed model would utilize a single "expected loss" measurement for the recognition of credit losses. This would replace the multiple existing impairment models in U.S. generally accepted accounting principles (GAAP) that primarily use an "incurred loss" approach.

Under the proposal, Martone said, a credit union would estimate the cash flows that it does not expect to collect, using all available information, including historical experience and forecasts about the future. The proposed approach--referred to as the current expected credit loss (CECL) model--considers more forward-looking information than is currently permitted under GAAP.

Martone said credit unions are concerned that:

  • The model could cause a doubling of an entity's credit impairment allowance; and
  • The proposed "expected loss" approach would require use of speculative forecasting of the performance of an asset over the remainder of the asset's life.During this year's Governmental Affairs Conference, CUNA's accounting subcommittee met with guests from the industry as well as the National Credit Union Administration to discuss this and other issues.
FASB is accepting public comments on the proposal until April 30, and CUNA is developing its comment letter on this issue which it will circulate later this month.

Consumer Financial Protection Bureau issues were also addressed during the call. Dunn said "CUNA is going to stay vigilant, but overdraft protection action does not seem to be at the top of the agency's list of priorities for the time being." She noted that student loans are a priority for the CFPB and CUNA is talking with the agency on those issues. She said NCUA has also raised issues regarding appropriate controls over student loan programs and that additional guidance may be developing. 

Thursday's session was the first of four related audio conferences CUNA is offering during the year. CUNA recommends that registrants attend all four to ensure a complete first-hand view of the latest regulatory and compliance issues, first-hand. An archived version of the session will be posted.

Other topics addressed during the free CUNA call included:
  • The latest legislative developments affecting credit unions;
  • Pending NCUA proposals and a summary of the February NCUA board meeting actions; and
  • Proposals currently open for comment.
News Now covered other CFPB and NCUA issues that were addressed during the call in Friday's edition. (See March 8 News Now story: New Credit Rating, CFPB Info Featured In CUNA Pressing Issues Call.)

Topics for the spring, summer and fall offerings will be announced as those programs are finalized. Those sessions are scheduled for June 4, Sept. 5 and Dec. 5.

For more on the CUNA call, and regulatory resources, use the links.

Current, Future CU Advocacy Efforts Detailed In The Cheney Report

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WASHINGTON (3/11/13)--Credit Union National Association President/CEO Bill Cheney and CUNA's legislative team last week continued to meet with new and continuing members of the U.S. Congress. In this week's edition of The Cheney Report, the CUNA CEO said many credit unions are comfortable with asking their members to also help advance credit union legislative goals.

CUNA's recent survey of credit union CEOs and board members has found that "more and more leaders throughout the movement embrace the vital nature of political engagement."

Altogether, 52% of board members that responded to the survey said they "strongly support" asking their credit union's members to oppose anti-credit union issues. Further, 35% of board members said they were "very" or "somewhat willing" to send members political direct mail in support of a pro-credit union candidate for office. Both of these numbers are increases from recent results.

The 2013 CUNA Governmental Affairs Conference showed how many credit unions are politically involved, but Cheney noted that "political success, and movement toward realizing our strategic vision, hinges on a willingness to engage your credit union's members when necessary.

"Clearly, more of you understand that," Cheney wrote.

CUNA has created an important members-only toolkit designed to help credit unions connect with their members and educate the public about credit unions. For more on the toolkit, use the resource link.

This week's edition of The Cheney Report also provided details on recent CUNA legislative advocacy efforts, commentary on just released credit union financial results, and details on this week's scheduled Senate Banking Committee confirmation hearing for Consumer Financial Protection Bureau Director Richard Cordray.

Each Friday, The Cheney Report delivers Cheney's insights on three to four key events and policy developments affecting credit unions into the e-mail inboxes of credit union CEOs.

The report also provides a valuable window into CUNA's actions on behalf of member credit unions, and reinforces the value of CUNA membership, CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile notes.

Past issues of The Cheney Report are archived on

NCUA Sets 2013 CU Workshop Schedule

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ALEXANDRIA, Va. (3/11/13)--Examinations, strategic planning, fraud detection, leadership and fair lending compliance will be among the topics addressed when the National Credit Union Administration holds its first free workshop of 2013 on March 22.

NCUA Office of Small Credit Union Initiatives staff and representatives from the Credit Union Executives Society, Real Solutions, CUNA Mutual Group and the National Federation of Community Development Credit Unions will share their insights during the workshop.

The free workshop will be held at the Double Tree Hotel Richmond Airport in Richmond, Va.

Additional workshops have been scheduled for the following dates and locations:
  • April 4 in Philadelphia, Pa.;
  • April 4 in Chicago, Ill.;
  • April 25 in Portland, Ore.;
  • April 27 in New York, N.Y.;
  • May 2 in Detroit, Mich.;
  • May 18 in Denver, Colo.;
  • June 22 in Houston, Texas;
  • June 28 in Minneapolis, Minn.;
  • July 20 in Honolulu, Hawaii;
  • July 25 in Pittsburgh, Pa.;
  • Aug. 15 in Memphis, Tenn.;
  • Sept. 12 in Independence, Ohio;
  • Sept. 28 in Buffalo, N.Y.; and
  • Oct. 17 in New Orleans, La.
For more on workshop registration, and scholarships to these workshops, use the resource link.

CUs' Helping Hand Covered In CU Magazine Story

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WASHINGTON (3/11/13)--This month's edition of News Now's sister publication, Credit Union Magazine, features an extensive article highlighting the many benefits of credit union membership.

The story, entitled "CUs Lend Members a Hand," notes that the worst of economic times tend to bring out the best in credit unions. Credit unions during the recent recession did what banks wouldn't: "They stood by their members and extended financial lifelines to those in need. They went the extra mile to help members in financial turmoil," the story says.

The Credit Union Magazine item provides an extensive  chart detailing how much credit union members saved, in total, between September 2011 and September 2012 due to credit unions' fee structure, and rates on savings and loans--a value that adds up to $5.8 billion annually.

Other ways that credit unions helped their members include:
  • Compiling a menu of existing products and services for members experiencing financial hardship;
  • Accepting higher levels of risk to continue lending to members with declining credit ratings;
  • Loans that aim to help members build their credit;
  • Training credit union employees to serve as financial educators; and
  • Partnering with community organizations.
Similar credit union outreach efforts have also been covered in a number of recent News Now articles noting how credit unions have helped members facing sequester furloughs. (See March 6 News Now story: More CUs Preparing Members For Sequestration Issues: A Special Report)

For the full Credit Union Magazine article, and more engaging stories, use the resource link.