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

WSJ columnist watches biggest banks 'freak' over tiny tax

 Permanent link
WASHINGTON (3/20/14)--Al Lewis, who writes columns for The Wall Street Journal Sunday and MarketWatch, is watching big banks' reaction to Rep. Dave Camp's (R-Mich.) draft proposal for tax code reforms and does not seem amused.

He calls attention to the fact that "America's too-big-to-fail banks are freaking out over one Republican lawmaker proposing a tiny tax" increase for those biggest banks. They are "freaking out," Lewis points out, despite their long and inglorious recent past of accepting "unfathomable billions" in taxpayer-funded bailouts, and more.

The increase Lewis refers to is a proposed 0.035% quarterly tax on bank assets, which would apply only to bank assets in excess of $500 billion.  (Editor's note: Total assets for all federally insured credit unions in the U.S. reached $1 trillion just in June 2012, according to National Credit Union Administration call report data.)

So what have big banks gotten from the government since the Fall and fallout of 2008, in addition to "unfathomable billions" worth of bailouts? Lewis calculates:

"The Federal Reserve also responded by buying trillions of dollars in illiquid mortgage-backed securities and government bonds from these institutions. This has ratcheted up the Fed's balance sheet from $869 billion in August 2007 to more than $4.1 trillion today ...

"Additionally, the Fed lowered interest rates to zero, and it has held them there for more than five years, giving these banks unprecedented access to free capital.

"Yes, zero interest rates would severely punish a whole generation of retirees and savers who didn't want to risk it all in Wall Street's casino. But the idea was that these banks would find ways to stimulate the economy. They would be so grateful to a helpful nation for saving them that they'd make loans to small-business owners who would in turn create jobs."

But that just didn't happen, Lewis notes. Bankers instead, he writes, "raised every fee they possibly could on their customers, they improperly foreclosed on millions of Americans' homes, they continually dodged prosecution for their alleged criminal activity, they fought Congress on just about every sensible idea lawmakers had for reforming a broken and corrupt banking system, and then they gave themselves bonuses."

NEW: Spots may go quickly for NCUA new 'listening sessions'

 Permanent link
ALEXANDRIA, Va. (3/20/14, UPDATED 2:30 p.m. ET)--Available spots may go quickly for the National Credit Union Administration's new series of "Listening Sessions."  The agency just announced that online registration is open.
 
Participation in the free sessions will be limited by the size of each meeting room and may hover around 150 per meeting. They are scheduled for:
  • June 26 in Los Angeles, from 1 to 4 p.m. (PT);
  • July 10 in Chicago, from 1to 4 p.m. (CT); and,
  • July 17 in Alexandria, Va., from 1 to 4 p.m. (ET).
The Listening Sessions will be open to any topics related to the NCUA and, importantly, will take place before NCUA's proposed risk-based capital (RBC) rule is finalized.

The Credit Union National Associatoin had urged the NCUA to hold a town hall-style meeting on the RBC proposal.

NCUA Chairman Debbie Matz said she initiated the face-to-face field meetings in 2012 to talk with credit union officials about how the agency can further improve regulations, the exam process and "other agency initiatives."

"The last Listening Sessions in 2012 generated many ideas that we later incorporated into NCUA's rules. I anticipate the 2014 sessions will produce similar results," Matz said.

NCUA board member Rick Metsger and senior agency staff will also participate in the meeting.
 
See resource link for registration information.

CFPB seeks design help for prepaid card disclosures

 Permanent link
WASHINGTON (3/20/14)--The Consumer Financial Protection Bureau was in Los Angeles this week to conduct consumer-interview testing of potential disclosures it may propose for use on the packaging of prepaid cards. The consumer testing effort was launched last month in Baltimore.
 
Click for slide showForm 1 (click to view Form 2)
The agency intends to conduct more tests around the country by the end of April before it settles on a disclosure plan. Last year, the CFPB identified prepaid card regulation as a 2014 priority.
 
The CFPB is developing a model disclosure form to standardize the disclosures so consumers can make side-by-side comparisons of the many products offered.  Currently, each prepaid card company's retail package discloses different information in different styles and using different formats to do so--making product comparisons challenging at best.
 
It is consumer-testing two model forms.
 
In a blog posting this week, the CFPB says it's developing the standardized disclosure form to include in an upcoming proposed rule. "We want our model form to clearly present a prepaid card's most important fees so you can easily identify the best prepaid card for your needs."

CUNA releases new RBC video resource for credit unions

 Permanent link
WASHINGTON (3/20/14)--Continuing to add resources for credit unions to its Risk-Based Capital (RBC) Action Center webpage, the Credit Union National Association Wednesday posted a new video that can help credit unions in three ways.
 
The new video is designed to explain the National Credit Union Administration's RBC proposal, address what credit unions can do to apply it to their situations, and define steps credit unions can take to get involved in the effort to improve the proposal.
 
Also on Wednesday, CUNA offered a free, one-hour webinar titled "NCUA's Risk-based Capital Rule: Can It Be Fixed?" Topics explored during the webinar included: key aspects of the proposal, the proposal's financial impact on credit union operations, and the top legal issues create by the proposal.  (See related story: CU CEOs outline real-life risks of RBC plan during CUNA webinar.) A recoding of the webinar will be available by Friday morning.
 
CUNA's RBC Action Center is a complete catalog of reference materials for credit unions and also provides credit unions with a tool to take action immediately by sending comment letters to the NCUA by the May 28 deadline.
 
CUNA strongly supports risk-based capital for credit unions, but warns that the NCUA's current proposal is not the approach to take. CUNA analysis shows that, as written, the NCUA plan could force credit unions to hold as much as $7.3 billion in additional capital.
 
CUNA President/CEO Bill Cheney has explained that equals a multi-billion-dollar price tag of additional capital for a system that withstood, under the current system, the worst financial crisis in 80 years.