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Legislation hearings on tap as CUs visit Hill

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WASHINGTON (3/20/12)--Washington will be packed this week, with credit union advocates taking their message to Washington legislators as part of the Credit Union National Association's (CUNA) 2012 Governmental Affairs Conference, and business will proceed as usual on Capitol Hill, with both the U.S. House and Senate in session.

The top item this week will likely be the release of the House Republican Budget, which is expected to happen today, but the House is also expected to consider bills under suspension of the rules early in the week, and will take up the Protecting Access to Healthcare (PATH) Act (H.R. 5) later in the week.

The Senate will continue to review the Jumpstart Our Business Startups (JOBS) Act (H.R. 3660), and may move on to other domestic violence prevention legislation later in the week.

CUNA staff will also track several hearings this morning, including:

  • A Senate Judiciary subcommittee hearing on student debt;
  • A Senate Banking Committee confirmation hearing for Federal Reserve Board of Governors nominees Jerome Powell and Jeremy Stein, Federal Deposit Insurance Corporation Board of Directors nominee Jeremiah Norton, Office of Financial Research Director nominee Richard Berner, and Troubled Asset Relief Program special inspector general nominee Christy Romero; and
  • A House Financial Services Committee hearing on the state of the international finance system, which will feature testimony from Treasury Secretary Timothy Geithner.
The Senate Banking Committee securities and insurance subcommittee will address investor risks in crowdfunding on Wednesday morning, and a House Small Business Committee hearing on how entrepreneurs can lead economic recovery is scheduled for early Wednesday afternoon. The House Judiciary courts and administrative law subcommittee is also scheduled to discuss federal regulations and regulatory reform under the Obama Administration that afternoon. Small Business Administrator Karen Mills is also scheduled to testify at a Wednesday afternoon House Appropriations subcommittee on financial services hearing on the Small Business Administration's budget for fiscal year 2013.

A Thursday morning House Financial Services financial institutions and consumer credit subcommittee hearing entitled "The Future of Money: How Mobile Payments Could Change Financial Services" has also been scheduled.

Around 1000 bankers will also be in town for this week's American Bankers Association Government Relations Summit, discussing, among other things, how to "out hustle and outmuscle" credit unions, and those bankers are also planning to visit with members of Congress this week, CUNA Senior Vice President of Legislative Affairs Ryan Donovan noted.

Former Sec. of State Rice addresses CUNAs GAC

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WASHINGTON (3/20/12)--Former Secretary of State Condoleezza Rice says China's seemingly booming economy is beginning to show some stresses and strains, which could be attributable to the country's authoritarian management.

Click to view larger image Former Secretary of State Condoleeza Rice, a 30-year member of Stanford FCU, discussed U.S. and international politics, and the ongoing Republican primary, at CUNA's Governmental Affairs Conference  Monday. (CUNA Photo)
She said, during a speech Monday afternoon at the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC), that China's support has been built on continued prosperity, which sooner or later will begin to slow. She said one indication that China lacks a "confident leadership" is its preoccupation with surfing the Internet to weed out alleged dissidents.

Rice served as Secretary of State under President George W. Bush. At the end of Bush's term, she returned to her position as a Stanford University Political Science Professor.

She began her speech before the CUNA audience by pointing out that she has been a member of Palo Alto, Calif.-based Stanford FCU for 30 years.

During the presentation and question period, Rice covered a number of international, political and governmental issues. In response to one question, Rice said she was not concerned about the current combative nature of the Republican presidential primary. In fact, she said, it might be a constructive.

"During primaries, there is always lots of turbulence. Actually we are having a proxy on what the role of the federal government should be--particularly how big it should be.

"Once we get past this, we will unite in how to change the government's role on health care and other life style issues," she said.

GAC attendees offered advocacy advice

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WASHINGTON (3/20/12)--Attendees of the Credit Union National Association's (CUNA) 2012 Governmental Affairs Conference (GAC) received their advocacy marching orders on Monday, with CUNA staff and a guest speaker briefing a packed conference hall on the latest legislative and political issues, and how best to convey the credit union point of view on these matters.

As around 4,000 credit union advocates are preparing to meet with their federal legislators this week, Ryan Donovan, CUNA senior vice president of legislative affairs, said a top issue for credit unions will be working to increase the member business lending (MBL) cap. Bills that would increase the cap to 27.5% of assets, up from 12.25%, are active in both the U.S. House and Senate, and Senate Majority Leader Harry Reid (D-Nev.) last week said he was working to bring Sen. Mark Udall's (D-Colo.) MBL bill, S. 509, up for a Senate vote.

Credit union advocates should remind legislators during their visits that credit unions stood by small businesses during the financial crisis, and they should be sure to emphasize that increasing the MBL cap is all about allowing credit unions to help small businesses, Donovan said. Capitol Hill visitors need to tout the safety of MBLs, which have the lowest charge-off and delinquency rates of any loans provided by credit unions, he added.

The only thing standing in the way of an increased MBL cap at this point is opposition from the banking industry that was bailed out during the economic crisis and now all-but refuses to lend to small business owners, Donovan said.

Credit union representatives can also take this opportunity to educate their members of Congress on how statutory restrictions on supplemental capital impact credit unions, and how allowing greater access to capital can help them to help their members, Donovan added. Housing finance reform, ATM fees, cyber security issues and the benefits that the credit union tax status could also be discussed during meetings, he said.

The personal stories of credit union members are vital to any credit union advocacy efforts. "If we don't speak up for credit unions, nobody else is going to do it, and their are plenty who will speak against us," Donovan said.

Brad Fitch, president/CEO of the Congressional Management Foundation and former Capitol Hill staffer, said personal stories involving constituents can truly reach legislators, and help communicate why a legislator should support or oppose an issue.

"I have easily been involved in a thousand decisions that Congress has made and I am telling you that constituents matter more than they think," Fitch said.

"You have the most powerful information that legislators need: how it impacts their constituents," he said, adding that that information is "more important than any congressional research report, and more valuable to them."

Fitch recommended that visiting credit union representatives know what committees their legislators serve on, know what legislation they've introduced, and even know when their picture appears appear in the local newspaper.

"They're really normal people and they like to do a chit chat at the beginning of the meeting," he said. He also suggested advocates communicate frequently with lawmakers to build a relationship.

These advocacy efforts will be even more important as November's federal and state elections approach, and Richard Gose, CUNA's senior vice president of political affairs, said credit unions have a chance to impact races this November, and develop relationships with up and coming legislators that will listen to credit union concerns once they reach office.

Gose added that the loyalty of credit union members can go a long way when credit unions seek support in Congress.

This type of political advocacy can be just as effective on the state level, Pat Sowick, CUNA senior vice president of league relations, said. The relationships that credit unions can develop now, while legislators are in state governmental positions, can reap benefits for years to come as some state legislators move on to federal office, she added.

Cheney says CUs on the rise in GAC opening remarks

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WASHINGTON (3/20/12)--Credit Union National Association (CUNA) President/CEO Bill Cheney said credit unions are "on the rise" and offered attendees of CUNA's Governmental Affairs Conference (GAC) plenty of reason for optimism during his opening remarks on Monday.

CUNA's GAC runs through Thursday.

Cheney noted that overall credit union net worth--which never dipped below "well capitalized"--has rebounded, after bottoming out in 2009. At the end of 2011, credit unions had reached 10.2% net worth, nearly $100 billion--a 41.2% increase over the previous year. CUNA economists predict credit union net worth ratio will reach 10.6% in 2012.

"That's a testament to sound management by credit unions--making the tough decisions for their institutions," Cheney said.

Loan growth is also on the rise again, he said. In 2012 loan growth is expected to by 4% over 2011--and by 6% next year. Later this year credit unions will reach more than $1 trillion in total assets, Cheney added.

"More and more consumers are looking to credit unions as their best option in financial services," he said. "They are looking for ways to beat the high fees and costs of banks. And those that own businesses are looking for a ready source of credit, which the banks aren't giving them."

In fact, credit unions added more than 1.3 million members last year before and after "Bank Transfer Day," Nov. 5. Cheney also introduced Bank Transfer Day founder Kristen Christian, who stressed the importance of passing member business lending cap increase legislation.

Christian encouraged legislators to "think of our communities, and raise the member business lending cap so we can build a brighter tomorrow by working together today."

CUNA's Cheney reiterated that, despite challenges, credit unions are in a position of strength.

"We're stronger financially, have incredible public support, arguably the best press coverage that we've ever had, a new, bolder approach on Capitol Hill--and strong, determined champions in Congress," he said.

"Plus, we have the dedication and commitment of credit union staff and volunteers across the nation. With all of that going for us, there can only be success--and the best times for our movement--ahead of us," Cheney said.

Follow along with CUNA blogs instant GAC coverage

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WASHINGTON (3/20/12)--The freshest news and notes from the Credit Union National Association's (CUNA) 2012 Governmental Affairs Conference (GAC), and up-to-the-minute coverage of key GAC speakers and sessions, will be available on its GAC news blog, CUNA NewsWire.

Readers can access NewsWire via a linking button on News Now's headlines page. More than 4,000 credit union representatives are in town for CUNA's premier conference featuring addresses by top policymakers, and more.

CUNA Editorial Communications Vice President Lisa McCue, Web Assistant Editor Ron Jooss, and Communications Specialist Darryl Tait will provide the latest news from GAC sessions, including key breakout sessions. For full coverage, read CUNA's daily online news service News Now, keep up with NewsWire, and follow News Now's twitter feed, NewsNowLiveWire. CUNA News Now, and others, will be using the hashtag #CUNAGAC12 on their tweets.

Find all these news resources on the News Now headlines page at www.cuna.org. Use the resource link below to access the GAC Blog.

Also, the League of Southeastern Credit Unions is presenting video reports during the GAC through Thursday. Use the link to access those reports. And CUBE TV, the official video portal of the Michigan Credit Union League & Affiliates, will provide a daily wrap-up of highlights and visits with Michigan's congressional delegation.

May Cheney reflect on pivotal year at CUNA annual meeting

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WASHINGTON (3/20/12)--Credit Union National Association (CUNA) President CEO/Bill Cheney and outgoing board chairman Harriet May, CEO of GECU, El Paso, Texas, reflected on a "pivotal' year for credit unions and told 2012 CUNA Governmental Affairs Conference attendees they had an opportunity to be a "big voice" in Washington this week.

The CUNA GAC runs through Wednesday, with additional Hill visits to federal lawmakers scheduled for Thursday.

Cheney noted how credit unions added significant numbers of new members this year, reasserted themselves through grassroots power, and won unprecedented press coverage, in part through the momentum surrounding Bank Transfer Day (BTD), held on Nov. 5.

Kristen Christian, the young BTD organizer who reported spending 20 hours a day meeting commitments related to the event in the days leading up to Nov. 5, was greeted enthusiastically when she took the CUNA GAC stage prior to Cheney's remarks.

Cheney also hailed credit unions for efforts to attack the regulatory burden they face. One in three comment letters delivered to the National Credit Union Administration urged the agency to dial down regulations, Cheney said. CUNA developed the Credit Union Exam Bill of Rights and the Examination Reporting Form--tools for credit unions to use to illustrate the impact of burdensome regulation.

Click for slide showExiting CUNA Board Chairman Harriet May addresses the 2012 CUNA GAC. (CUNA Photo)
In her comments, exiting CUNA Board Chairman May said CUNA's top regulatory issue is to relieve the regulatory burden of its members.

"It's a burden we need a relief from," May said.

CUNA helped credit unions generate more than half of the 11,000 comments the Federal Reserve Board ultimately received on its proposed debit card interchange rule, imposed under the Dodd-Frank financial reforms, pointing out key issues and needed changes for credit unions in the proposal, Cheney said.

In four months, CUNA and state credit union leagues helped to generate more than 70% of 600,000 credit union contacts with Congress in support of "stop, study, start over" on debit interchange legislation.

In addition to regulation and interchange, CUNA testified eight times before U.S. Senate and House committees, and filed nearly 70 letters with senators and representatives on issues such as data and cyber-security, non-resident alien deposits, patent reform, flood insurance, regulatory oversight reform, Cheney reported to the credit union audience.

CUNA also helped credit unions save money, Cheney noted. Through CUNA Strategic Services, owned jointly by CUNA and the leagues, credit unions saved $30 million through alliance relationships. As a result, CSS contributed nearly $3.2 million back to CUNA and the credit union system, offsetting dues and providing more resources to advocate for credit unions.

May will retire as CEO of GECU March 31.

"It has been a pleasure serving you," she said. "Go forward and fight for credit unions."

NCUA sets meetings to hear CU concerns

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WASHINGTON (3/21/12)--The National Credit Union Administration (NCUA) will host a series of "listening sessions" to gather credit union comment between May and July, NCUA Chairman Debbie Matz announced at the Credit Union National Association (CUNA) 2012 Governmental Affairs Conference (GAC) on Monday.

Click for slide showNCUA Chairman Debbie Matz. Click for slideshow of day one at the 2012 GAC.
The sessions, which will begin on May 2 in Boston, Mass., will center on how NCUA examination processes can be improved and how the agency can reduce or streamline existing regulations. (Bill Myers, director of the NCUA's Office of Small Credit Union Initiatives, addressing a crowd of small credit union representatives Sunday at the GAC, said the NCUA is considering streamlining the examination process for small credit unions. See News Now March 19)

Matz encouraged GAC attendees, "What you have to say is important, and sometimes it helps to discuss issues face-to-face."

The agency has also scheduled a May 9 session in Alexandria, Va.; a June 5 session in St. Louis, Mo.; a June 12 session in Orlando, Fla.; a July 10 session in San Diego, Calif.; and a July 31 session in Denver, Colo. All meetings are planned to begin at 1 p.m. and end at 4 p.m.

Matz in her remarks also asked what credit unions would look like in 2034, the 100th anniversary of the Federal Credit Union Act, and outlined future success for credit unions.

For the credit union system to continue to grow, the NCUA must do its part to ensure the credit union system prospers by adhering to its mission of safety and soundness while imposing the lightest possible regulatory burden, Matz said.

As the credit union system continues to stabilize from the pressures of the country's economic meltdown, credit unions must look beyond the short term and take the long-term view to capitalize on the strengths of the system, she added.

Credit unions must take actions necessary to keep them strong, including exercising due diligence, ensuring their board members are properly trained, and focusing on strategic planning, Matz said.

Noting that the average age of a credit union member is now 47, Matz urged credit unions to work harder to woo younger membership, for the good of their own institutions and the credit union system as a whole.

Young people expect services like mobile banking and online bill-paying, immediate service around the clock, and to open accounts and get approved for loans online. "If you don't offer what they expect, they're going to take their business elsewhere. That's why it's absolutely essential that you use all the tools at your disposal to win over the next generation," she said.

It is also vital for credit unions and the NCUA to work together to support beneficial legislation, Matz said, noting the promise that increasing the member business lending cap and allowing greater access to supplemental capital hold for credit unions.

"If we, together, find common understanding on our distinct roles, as well as our shared goals, I believe that in 2034, credit unions celebrating their centennial will look back at all the progress we have made together, and see it for what it is: a new beginning," Matz said.

Cordray says CFPB will help level playing field for CUs

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WASHINGTON (3/20/12)--Consumer Financial Protection Bureau Director Richard Cordray noted Monday that credit unions provide "high quality products and services" to their members.

He said that the not-for-profit model makes credit unions unique and especially pro consumer. He praised credit unions for their efforts on financial literacy, including the mortgage classes that many of them hold.

Click for slide showCFPB Director Richard Cordray. Click for slideshow from day one at the 2012 GAC.
"Your model is just as sound today as it ever was,'' Cordray said during a speech at Monday afternoon's session of the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC).

CUNA's GAC runs through Thursday.

Hoyer praises CUs for helping people realize their dreams

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WASHINGTON (3/20/12)--House Minority Whip Steny Hoyer (D-Md.) praised credit unions for the "remarkable'' role they have played in helping make the middle class's "lives and dreams possible.''

Hoyer noted that his mother had been an employee of a credit union and that he had been taught about the importance of credit unions at a young age. Those lessons, combined with the good work of credit unions, have been the key reasons he has always been a supporter of the credit union movement, Hoyer explained.

Click for slide showRep. Steny Hoyer. Click for slideshow from day one at the 2012 GAC.
He made his comments during a speech at Monday afternoon's session of the Credit Union National Association's Governmental Affairs Conference.

"People live in a more stable and prosperous country because of the work you do,'' he said. "The services you provide make a real difference in the lives of the 90 million people who are your members.''

Hoyer, the second-ranking member of the Democratic leadership, said legislation--currently being considered by the U.S.  Congress and aimed at encouraging more business expansion and greater access to capital--would help the economic recovery, which is just now taking off. Some of the proposals are intended to create more manufacturing jobs and if this happens it will create a more prosperous workforce since those jobs tend to be higher paying, he noted.

In addition, he said there needs to be changes in the tax code and regulations to create a more favorable business environment.

Hoyer praised the efforts of Congress to strengthen the policing of financial service providers whose actions caused the financial crisis. He said that the Dodd-Frank Act, which Congress passed in 2010, was aimed primarily at ensuring that the big banks never again took undue risks that required government bailouts.

He noted that "credit unions have never needed a bailout.''

He also said that it is incumbent upon Congress to make progress to contain the growth of the debt and deficit. He said there must be reductions in both mandatory and discretionary spending because bequeathing this level of debt to the next generation is "immoral.''

Woodward and Bernstein What if it happened now

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WASHINGTON (3/20/12)--Journalists Bob Woodward and Carl Bernstein, whose reporting helped uncover the Watergate scandal, suggested the stories they published back then might not have the same historic impact today.

The bombshell revelations of the time helped trigger a chain of events that eventually ended in the resignation of President Richard Nixon, and the arrest and conviction of former White House staff members, and other government officials.

But the two journalists, in an appearance before the Credit Union National Association's Governmental Affairs Conference here in t
Click to view larger image Journalists Bob Woodward (background) and Carl Bernstein (foreground), whose reporting helped uncover the Watergate scandal, suggested the scandal, which helped trigger a chain of events that eventually ended in the resignation of President Richard Nixon, may not have had the same impact on Congress, the media, or the average citizen, if it happened today. (CUNA Photo)

he Washington Convention Center, said they are not convinced that today the present Congress, the media, and the average citizen would react the same way.

"Back then, the system worked," Woodward said.  "People did everything in a systematic way."  He noted the congressional Judiciary Committees at the time voted unanimously to investigate the alleged misconduct detailed in their stories.  "Today, you see the Judiciary Committees totally polarized," he added.

"Also, there is a totally different media atmosphere today," Bernstein told the CUNA group. "There are not as many people of conscience. It's harder to find someone who will step out of the mold." Bernstein suggested the media may simply be reflecting its audience.

He said today most of those using the many platforms of information, such as the Internet, appear to be seeking data intended to reinforce their own interests and views.

Both Woodward and Bernstein emphasized they could not have written those celebrated news stories back then without the support of their newspaper, The Washington Post. They especially emphasized the role of publisher Katherine Graham. "She was totally intellectually engaged," Bernstein said.

"She knew what we were doing, but she was not telling us what to do."

He said this was true even though the two now-renowned journalists were at the time members of the newspaper's less prestigious city staff, rather than its elite  political reporting  group.

Inside Washington (03/19/2012)

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  • WASHINGTON (3/20/12)--The U.S. Treasury Department's Community Development Financial Institutions Fund (CDFI Fund) is accepting public comment on its CDFI Program application. Commenters can give their opinion on whether targeting CDFI funds into highly distressed communities an appropriate use of CDFI Program funds. The Fund is also asking if their application should be modified to ease paperwork burdens, and whether the application asks the appropriate questions to determine an applicant's health and viability. Potential CDFI Program applicants, community and economic development trade groups, and members of the general public can comment, the CDFI Fund said. The CDFI Fund will accept comment until May 18 …
  • WASHINGTON (3/20/12)--Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB) was challenged by reporters last week at the Society of American Business Editors and Writers 49th annual conference in Indianapolis who asked Cordray if the nascent bureau has enough power to be effective in its policymaking (American Banker March 19). Cordray told the press crowd that the bureau already has come far in its efforts to regulate the consumer side of the financial services industry. Cordray said that while the federal financial regulators continue to regulate the financial institutions under their respective jurisdictions, the CFPB has authority over those institutions in terms of how they treat consumers.  He said no agency can comprehensively regulate the entire national banking industry, and the CFPB is part of the comprehensive regulatory structure. Credit unions with less than $10 billion in assets are exempt from CFPB oversight …
  • WASHINGTON (3/20/12)--Borrowers have a new route to file suit against mortgage servicers that balk at providing modifications for troubled mortgage loans. An appellate court decision that came down earlier this month may inspire some new lawsuits which could, in turn, bog down the Home Affordable Modification Program (HAMP) through drawn-out litigation. Judge Kenneth Ripple wrote in his opinion on March 7 that the U.S. Treasury Department, charged with overseeing HAMP, was notably absent in the mortgage servicers case and added that adjudicating the matter would have been assisted greatly had the U.S. entered the case, even as a "friend of the court" via an amicus brief ...