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Strength in numbers shows in CUs Hill visits

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WASHINGTON (3/23/12)--Credit unions continued to walk the halls of Congress on Thursday, the last day of the Credit Union National Association's (CUNA) 2012 Governmental Affairs Conference (GAC), ending a week in which credit union representatives from across the country packed into congressional offices.

With about 4,000 credit union advocates attending this year's GAC, some of the Capitol Hill meetings with each of the 535 House and Senate members moved out of offices and into larger meeting rooms.

Click for slide showIowa Senator Tom Harkin (D) discussed member business lending with his visitors. Click for more credit union and league visits to Capitol Hill.
Nearly 100 Ohio credit union representatives traveled to Washington this year. Among their meetings was one with Sen. Sherrod Brown (D), who is a supporter of increasing the member business lending (MBL) cap.

The credit union advocates discussed member business lending and other key issues, including regulatory burdens and the need for access to supplemental capital. Those were also the topics of discussion in a meeting the Ohio group had on the House side, with Rep. Jim Jordan (R), who met with representatives of several credit unions during a breakfast reception.

Credit union support has been strong in New Jersey, with six legislators from that state already co-sponsors of MBL legislation and two more backing the Financial Institution Examination Fairness and Reform Act (H.R. 3461).

Rep. Steve Rothman (D) said he would cosponsor both H.R. 3461 and credit union supplementary capital legislation during his meeting with New Jersey representatives, and New Jersey Credit Union League President/CEO Paul Gentile said the newfound support is "proof-positive of the value of taking time to meet face-to-face with our lawmakers."

"We had positive feedback from more than one office on the two newer pieces of legislation and we expect additional New Jersey cosponsors in the coming weeks," he added.

A delegation of Mississippi credit unions, led by the Mississippi Credit Union Association, met with Rep. Bennie Thompson (D), and during the meeting, Bill Bynum, CEO of $68 million Hope Community CU, Jackson, Miss., said the MBL cap prevents many credit unions from entering the member business lending market. The Mississippi credit union representatives also stressed that member business lending can serve as an important source of capital for African American entrepreneurs.

Among the many other credit union meetings on Capitol Hill, representatives from Louisiana credit unions met with Sen. David Vitter (R) to discuss the benefits of increasing the members business lending cap, and Vitter listened as executives from Louisiana credit unions individually shared their stories about the restrictions the member business lending cap places on their institutions, and the positive work they could do in their communities if the cap increased to 27.5% of assets.

One Louisiana credit union representative told Vitter that many credit unions cease making business loans when they near the 12.25% lending cap for fear of admonishment from National Credit Union Administration examiners.

Also, more than 20 credit union advocates from Vermont met with Sens. Pat Leahy (D) and Bernie Sanders (I), who are both MBL cosponsors. The group thanked the longtime legislators for their support, and asked them to encourage their colleagues to do the same. Association of Vermont Credit Unions President Joe Bergeron said his state's credit unions are stepping up to support "viable small business credit needs that others are turning away."

Access the slideshow to view other credit union advocacy efforts.

CUNA sends CUs off with advocacy advice GAC breakout

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WASHINGTON (3/23/12)--Credit Union National Association (CUNA) Vice President of Political Affairs Trey Hawkins and other panelists discussed how credit unions can engage and motivate their members to elect new credit union champions to Congress in a Credit Union National Association Governmental Affairs Conference (GAC) breakout session.

Trey Hawkins, CUNA vice president of political affairs, said CUNA and credit union leagues find it easier to work with political candidates for the benefit of credit unions when the credit unions they are serving are also active in the political process. Also pictured, from right to left, are: Gwinnett FCU President/CEO R. Marshall Boutwell, Valley CU CEO Jean Wheat-Palm, and Mountain West CU Association President/CEO Scott Earl. (CUNA Photo)
Jean Wheat-Palm, CEO of Salem, Ore.-based Valley CU, and R. Marshall Boutwell, president/CEO of Athens, Ga.-based Gwinnet FCU, joined Hawkins on the breakout session panel, which was moderated by Mountain West Credit Union Association President/CEO Scott Earl.

Overall, Hawkins said, CUNA's strategy is to support credit union supporters.

One such supporter, Rep. Suzanne Bonamici (D-Ore.), met with Wheat-Palm and other Oregon credit union representatives early in her campaign, and the support of credit unions, which came in the form of donations and volunteerism, pushed her on to a special election win earlier this year. Bonamici has continued to support credit unions following her election, making herself a co-sponsor of member business lending cap increase bill (H.R. 1418) within an hour of having been sworn in. Bonamici has continued to communicate with credit unions in her district, Wheat-Palm noted.

If legislators find themselves in competitive races, they will want more support, and credit union advocates can work with those legislators to develop credit union friends out of someone that may have originally been "middle of the road" on credit union issues, Boutwell added.

Some credit unions can be tentative, at first, to become politically involved, due to potential issues with membership, the panelists said, but working with elected officials can be beneficial.

Boutwell cited the positive example of first-term U.S. House member Rob Woodall (R-Ga.), who he said understands credit union issues and has "turned out to be one heck of a credit union friend." Woodall is also a current MBL bill sponsor.

The panelists noted, however, that it takes coordination from all levels, CUNA, state credit union leagues, and individual credit unions, to recognize the full benefit of political advocacy.

CUNA, Leagues and credit unions teamed up this week to take the credit union message to Capitol Hill, as credit union advocates targeted all 535 offices of the House and Senate for meetings. (See related story: Strength in numbers shows in CUs' Hill visits)

Inside Washington (03/22/2012)

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  • WASHINGTON (3/23/12)--The U.S. Treasury Department is asking the Federal Housing Finance Agency to reconsider its strategy not to accept principal reductions on loans purchased by Fannie Mae and Freddie Mac, Treasury Secretary Tim Geithner told lawmakers Wednesday (American Banker March 22). Geithner, who appeared at a hearing with Federal Reserve Board Chairman Ben Bernanke before the House Oversight Committee, said Treasury is trying to convince FHFA Acting Director Ed DeMarco that in some cases an economic case can be made that principal write downs would limit the future losses for the government-sponsored enterprises. Demarco has said other tools such as lower interest rates and longer loan terms would more effectively limit losses. ...
  • WASHINGTON (3/23/12)--Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said Wednesday regulators should consider the differences between financial institutions when drafting rules--rather than drafting separate rules for financial institutions of different sizes, as he had previously said. Cordray's remarks were made in answer to a question posed at a Consumer Bankers Association conference (American Banker March 22). Under the Dodd-Frank Act, the CFPB is responsible for oversight of financial institutions with assets of more than $10 billion. …
  • WASHINGTON (3/23/12)--John Walsh, acting Comptroller of the Currency, told bankers that the Office of the Comptroller of the Currency, along with other federal financial regulators spoke out against the Financial Institutions Examination Fairness and Reform Act Wednesday. (American Banker March 22). The bill would give financial institutions the right to appeal regulatory exams to an independent ombudsman. Walsh said his agency has put in place a process for banks to appeal exams, including an ombudsman. Walsh said the new measure would require the creation of a new federal bureaucracy--a program office under the Federal Financial Institutions Examinations Council that will have to be newly funded and staffed. …

CFPB ombudsman blogs on sobering student debt

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WASHINGTON (3/23/12)--Rohit Chopra, the Consumer Financial Protection Bureau's student loan ombudsman, posted a recent blog entry that called the country's student debt market "too big to fail," and noted that among problems presented by this massive student debt is its effect of slowing the recovery of the housing market.

Noting the bureau's recently launched effort to understand the size of the private student loan market, Chopra called the finding "sobering," and said it appears student loan debt hit the trillion dollar mark several months ago.  That finding, he wrote, is much larger than estimates from other recent reports.

Chopra blogged: "Students borrowed $117 billion in just federal student loans last year. And students continue to borrow private student loans, which lack the income-based repayment and deferment options of federal student loans. If current trends continue, there will be consequences not just for young people, but for all of us."

As noted above, slowing the recovery of the housing market is one such consequence.  "Student loan borrowers are sending big payments every month to their loan servicers, rather than becoming first-time homebuyers. This debt can also put added stress on the borrowing capacity of the household and government sector," the CFPB ombudsman wrote.

The CFPB says it is tackling the student debt problem from a number of fronts, such as working with the U.S. Department of Education and launching the "Know Before You Owe" project to help borrowers, including student borrowers, understand debt implications.

Chopra said the bureau will release the full results of its study on the private student loan market this summer.

Compliance FCUs must tweak Equal Housing Lender notices

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WASHINGTON (3/22/12)--Faithful readers of the Credit Union National Association's (CUNA) CompBlog will have seen already that recent technical changes approved by the National Credit Union Administration (NCUA) at its March meeting earlier this month require federal credit unions that offer mortgages to revise their Equal Housing Lender notices.

Section 701.31 of the NCUA rules was updated to reflect the designation of NCUA's Office of Consumer Protection to hear discrimination complaints under the Equal Credit Opportunity Act and Fair Housing Act. The NCUA's Office of Examination and Insurance was previously assigned this responsibility.

That change prompts the needed change to the notice: credit unions   must remove references to the Office of Examination and Insurance and replace those references with the Office of Consumer Protection. 

According to the NCUA Board Action Bulletin, "credit unions engaging in real estate-related lending will have a reasonable amount of time to post updated Equal Housing Lender signs in public areas."

For the agency bulletin and the Federal Register document of the rule change, use the resource links below.