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NEW: NCUA Seeks Comment On Fixed-Asset Rule Clarifications

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ALEXANDRIA, Va. (UPDATED: 3/14/13, 10:15 a.m. ET)--At what was a very brief meeting this morning, the National Credit Union Administration has just voted to seek comments on a proposal that clarifies and reorganizes portions of its rule addressing federal credit union ownership of fixed assets.  Comments will be due 60 days after the plan is published in the Federal Register.

The proposal is not intended to impose new requirements on credit unions, but would update the existing regulation by reorganizing and clarifying the current requirements in a more user friendly format.

The NCUA also voted to approve a community charter conversion request from Cinfed FCU, Cincinnati, Ohio.

The NCUA's closed session, which will follow the open meeting, will feature three items. Those items are:

  • A purchase and assumption request;
  • A merger request; and
  • Requests under Section 205(d) of the Federal Credit Union Act, which deals with prohibitions on individuals convicted of crimes involving dishonest and exceptions to those prohibitions.
Watch News Now for more on the NCUA meeting results.

Fed Changes Time For FOMC Statements, News Conferences

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WASHINGTON (3/14/13)--The Federal Reserve announced Wednesday that it is cutting the time between the release of the Federal Open Market Committee's (FOMC) quarterly statement and the beginning of the news conference to discuss the FOMC actions.

From now on, FOMC policy statements for all regularly scheduled meetings will be released at 2 p.m. (ET).  For meetings with news conferences, the committee's current economic projections will also be released at 2 p.m. (ET) and the Fed chairman's news conference will begin at approximately 2:30 p.m. (ET).

CUNA Works All Fronts For CU Reg Relief

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WASHINGTON (3/14/13)--The Credit Union National Association works every day to fight credit unions' regulatory burden on three fronts--legislative, regulatory and political, CUNA Executive Vice President of Government Affairs John Magill notes.

"CUNA is on Capitol Hill to talk about regulatory burden every single day, meeting with legislators and members of their staff, whether the discussion is addressing pending legislation or looking for future avenues of relief," Magill adds.

These efforts are meant to keep the issue of regulatory relief for credit unions in the forefront of the minds of lawmakers and regulators and have meant results for credit unions in recent months: CUNA-backed legislation that would reduce the frequency of costly member privacy notices passed the U.S. House this week.

That followed closely on the heels of last year's bill that revised Regulation E to require that ATM fee disclosures only need to be presented on an ATM's screen. That bill was signed into law in December. CUNA's current priorities remain protecting the credit union tax status and supporting legislative priorities such as increasing the member business lending cap and providing greater access to supplemental capital to credit unions.

On the regulatory front, CUNA is continually communicating with the range of agencies that affect credit unions, including the National Credit Union Administration, to urge regulatory relief. CUNA CEO Bill Cheney met personally with NCUA Chairman Debbie Matz as recently as Tuesday.

One recent action that reflects CUNA's work is the agency's approval of a regulation that increases the asset-size threshold that defines a "small" credit union, notes CUNA Deputy General Counsel Mary Dunn. CUNA-recommended changes were included in the NCUA's final regulation. CUNA also advocated for an expanded definition of "rural district" as it applies to field of membership, which NCUA approved last month, as well as authority for federal credit unions to purchase Treasury Inflation Protection Securities. CUNA is strongly encouraging the agency to take other steps to address examination and regulatory burden issues.

CUNA also is working proactively to urge the Consumer Financial Protection Bureau to focus more attention on exemption of credit unions and on regulating entities in the financial marketplace that engage in abusive practices, such as payday lenders, that have been unregulated or under-regulated to date. CUNA has also urged the agency to guard against overburdening credit unions with unnecessary rules, and has called on the CFPB to bring its awareness of the credit union difference into play as it develops any new rules.

These types of legislative and regulatory improvements "are paramount if credit unions want to be able to offer much-needed services to more members, and we are broadening our focus so we can incorporate everyone into this effort--CUNA, the state credit union leagues, small business advocates, and consumers," Magill says.

CUNA research shows credit union leaders are becoming more receptive to involving their members in political affairs, noting that 52% of board members that responded to a recent CUNA survey said they "strongly support" asking their credit union's members to oppose anti-credit union issues. "We need our members to be aware of what credit unions are doing for them and how they can be a part of that," CUNA Senior Vice President of Political Affairs Richard Gose notes.

Increased grassroots advocacy will help credit unions reach all 535 members of Congress, and Gose reiterated the CUNA/credit union league Plan to Win has an outline for how best to reach all members of Congress: From committee leadership to first-time legislators.

"We may not turn them all into credit union champions, but we will be able to move them toward a higher level of credit union understanding and support," he said.

CUNA and leagues' thrust for regulatory relief is also central to achieving the new strategic vision for the credit union system that CUNA's Cheney outlined at the 2013 Governmental Affairs Conference, a vision where "Americans choose credit unions as their best financial partner."

Realizing this vision, he explained, will require that the credit union system "unite for good" to remove regulatory and legislative barriers, raise consumer awareness of credit unions, and foster movement-wide service excellence.

For more on CUNA's vision for the credit union system, use the resource link.

Small Creditor Escrow Relief Previewed By CFPB

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WASHINGTON (3/14/13)--A preliminary list of the counties in which small creditors will be exempt from pending escrow requirements has been released by the Consumer Financial Protection Bureau.

The CFPB's escrow rule, issued in January, generally extends the required duration of a mortgage loan escrow account to five years. The current minimum duration is one year. Lenders that work in rural or underserved areas will be exempt from the escrow changes, provided they meet certain other criteria, the CFPB said.

The preliminary list of CFPB-approved rural and underserved areas covers counties in 46 states and Puerto Rico. A finalized list will be released alongside some technical amendments to the escrow rule before June 1, the agency said. The escrow rule is also expected to be finalized at that time.

The CFPB said it will define rural counties by using the U.S. Department of Agriculture Economic Research Service's urban influence codes. Underserved counties are defined by reference to data collected under the Home Mortgage Disclosure Act, the agency said. Some counties' status may change from year to year, the CFPB added.

The Credit Union National Association has developed an escrow account compliance chart and other resources to help credit unions comply with this and other CFPB mortgage rules. The chart format is designed to help credit unions find the specific information they are looking for quickly. The chart covers the basics of the new rule and more detailed information, including:

  • Effective dates;
  • Exemptions and exceptions;
  • Significant definitions; and
  • What the new rule will change.
More comprehensive compliance summaries with interpretive explanations of the escrow changes are also in the works.

For the CFPB release and the CUNA chart, use the resource links.

Report Says Small Biz Unmet Capital Needs Harm Economy

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WASHINGTON (3/14/13)--A TD Securities report shows that limited access to capital is slowing the overall economic recovery, and this report underscores a longtime credit union argument: that the U.S. Congress must act to remove the low, arbitrary 12.25%-of-assets cap on credit union member business loans.

In a release cited on, TD Securites said overall credit conditions have been on the mend, but also noted access to credit has been limited for some small business owners.

The proportion of businesses ready to increase their capital spending has held steady at around 20%, below the pre-recession average of 30%, TD Securities reported. This shows credit access has impacted hiring and capital spending decisions, TD Securities noted.

According to U.S. Small Business Administration statistics, small businesses represent 99.7% of all employer firms, employ half of all private sector employees, and pay 44% of total U.S. private payroll.

Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) in mid-February introduced MBL legislation, H.R. 688, which would increase the credit union MBL cap to 27.5% of assets, from the current 12.25%-of-assets level. The bill, if enacted, would help credit unions lend an additional $14.5 billion to small businesses in just the first year after enactment. This money, which would be made available at no expense to taxpayers, would in turn help small businesses create around 158,000 new jobs.

The Credit Union National Association continues to strongly support the MBL bill, which has 63 cosponsors.

Exam Issues Are Topic Of Free NCUA Webinar

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ALEXANDRIA, Va. (3/14/13)--National Credit Union Administration Office of Examination and Insurance Deputy Director Timothy Segerson will discuss how agency examiners evaluate a credit union's ability to manage operational and balance sheet risk during a March 27 agency webinar.

The free webinar will be presented by the NCUA's Office of Small Credit Union Initiatives (OSCUI). It is scheduled to begin at 2 p.m. ET.

OSCUI staff during the webinar will also discuss:
  • How credit unions can effectively manage interest rate and liquidity risk;
  • How credit unions can control for concentration risk;
  • How a credit union can measure and manage technology risks;
  • Whether a credit union's internal controls are sufficient to deter and mitigate fraud, errors or other operational problems; and
  • Whether a credit union's supervisory committee and audit functions are adequate for its size and complexity.
The NCUA said webinar participants will also have the opportunity to gain insight from a staff member of a credit union that has gone through the net worth restoration plan process.

For the full NCUA release, use the resource link.
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