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Video reports from the CUNA GAC

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WASHINGTON (3/4/08)--The Michigan Credit Union League (MCUL) is producing daily video reports from the 2008 Credit Union National Association (CUNA) Governmental Affairs Conference (GAC) in Washington D.C. Mike Bridges, MCUL director of public affairs, will file video reports daily. The reports will focus on the general sessions, the speakers and Capitol Hill visits. Views also will also see some of the flavor of the conference, according to Bridges. Tuesday’s report will look at the general sessions and how the credit unions are preparing for Hill visits. Also included is a first-hand look at the exhibition hall and services that will make a difference for credit unions. Use the link below to access the “Live from CUNA GAC” videos.

Top UBIT issues in free CUNA webinar today

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WASHINGTON (3/4/08)—The Credit Union National Association (CUNA) is offering a free webinar today on issues surrounding unrelated business income tax (UBIT) for credit unions. The webinar will spotlight the latest information on a federal court challenge to the Internal Revenue Service’s (IRS) determinations that certain insurance products offered to members fall outside the credit union's main mission and are subject to UBIT. It is being broadcast as part of the breakout sessions offered during CUNA’s Governmental Affairs Conference here this week In January, Community First CU, Appleton, Wis., filed a court challenge against the IRS regarding its determination on insurance products. The credit union said at issue is about $54,000 in taxes it paid in 2006 on income from the sale of credit life and credit disability insurance, and guaranteed auto protection (GAP) insurance. While it is unlikely any outside parties will be allowed to join the suit, the credit union’s action is backed by CUNA, American Association of Credit Union Leagues, National Association of State Credit Union Supervisors NASCUS), and CUNA Mutual Group, which comprise the credit union movement’s UBIT Steering Committee. “The IRS position is untenable,” Eric Richard, CUNA’s executive vice president/general counsel has said. “They say credit unions should pay taxes even on some financial services products offered to their own members on a cooperative, not-for-profit basis. That’s just wrong. And we think the court will agree with us.” Scheduled panelists for the UBIT webinar include:
* Mary Martha Fortney, president/CEO, NASCUS; * Faye Patzner, chief legal officer, CUNA Mutual Group * CUNA’s Eric Richard, and * Brett Thompson, president, Wisconsin CU League.
Use the resource link below for more information about the free 2 p.m. ET webinar.

NCUA offers mortgage good habits tips

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ALEXANDRIA, Va. (3/4/08)—The National Credit Union Administration (NCUA) used National Consumer Week, designated as March 2-8 by President George W. Bush, as a springboard for a message to consumers about "good mortgage habits.” NCUA Chairman JoAnn Johnson, a member of the President’s Financial Literacy and Education Commission, said in a release Monday that it is crucial that consumers have useful and understandable information when making financial decisions—particularly the purchase of a home. Johnson outlined the following responsible mortgage habits for borrowers:
* Assess low fixed rates or very low payment amounts that may turn out to be valid only for an introductory period. Be aware that rates can rise substantially following that timeframe, which could substantially push up payment amounts; * Understand terms. Know that "low rate" could mean either the payment rate or interest rate. While the interest rate is the rate used to calculate the amount of interest a borrower will owe the lender each month, the payment rate is the rate used to calculate the amount of the payment the borrower is obligated to make each month. If the payment rate is less than the interest rate, interest due will not be covered and the loan balance will increase; and * Review all correspondence to ensure a lender is reputable and responsible.
Johnson noted that "financial education is an important step in helping consumers navigate the complex mortgage lending market. I encourage credit unions to continue proactive efforts to inform their members about these issues.” For more information, use the link.

CUNA New bill good but CUs need more

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WASHINGTON (3/4/08)—Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) introduced a new credit union bill Monday, one which would offer regulatory relief in 12 areas but does not go as far as the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). The bill was introduced just four days before a scheduled House Financial Services Committee hearing CURIA. Kanjorski heads that panel’s subcommittee on capital markets. Although it touches on many areas of CURIA, the new bill (H.R. 5519) does not contain language to increase the credit union member business lending ceiling or to transform prompt corrective action into a more risk-based system. H.R. 5519 is entitled the Credit Union Regulatory Relief Act (CURRA) of 2008. Credit Union National Association (CUNA) President/CEO Dan Mica said Monday, “We commend and thank Reps. Kanjorski and Royce for taking this bold step aimed at reducing the regulatory burden on credit unions. This timely legislation will get us a long way toward credit union goals--but not all the way: More needs to be done.” “Easing restrictions on business lending and providing more flexibility for credit unions in net worth requirements remain key goals for us. We will continue to urge Congress to consider CURIA, and will continue to seek co-sponsors for this important legislation," Mica said from CUNA’s Governmental Affairs Conference (GAC) here. As of Monday evening, CURIA carried 145 official supporters in the House. The new CURRA bill would:
* Permit the purchase of investment grade securities by federal credit unions ; * Increase the investment limit in credit union service organizations; * Exclude from the member business lending cap any loans to nonprofit religious organizations; * Allow the National Credit Union Administration (NCUA) to establish longer maturities for certain credit union loans; * Give the NCUA greater flexibility in responding to market conditions; * Permit, under certain circumstances, a federal credit union converting to a community charter to continue to serve groups outside the community; * Enable credit union participation in the Small Business Administration’s 504 programs; * Permit federal credit union to add service to underserved areas regardless of original field of membership; * Permit federal credit unions to provide for short-term payday loan alternatives for nonmembers within a the credit union ' s field of membership; * Permit a federal credit union to expel a member for cause, and to institute term limits for board members if it so chooses; * Encourage small business development in underserved urban and rural communities by providing for the exclusion of member business loans made in underserved areas from the business lending cap ; and * Provide an exemption from pre-merger notification of the Clayton Act.

Deep pool of untapped members shown in CUNA research

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WASHINGTON (3/4/08)—There are significant opportunities to attract new members within current fields of membership according to Credit Union National Association (CUNA) research, which finds that for many credit unions, reaching out will be increasingly important. In a presentation at CUNA’s Governmental Affairs Conference here, Dick Ensweiler identified three key new markets for credit union membership growth: Youth, immigrant and ethnic groups, and underserved segments of a community. Ensweiler is chairman of CUNA’s Membership Growth Task Force, as well as head of the Texas CU League. The task force was formed in 2007 to “investigate, report on, and encourage credit unions to embrace opportunities, techniques and processes” that will increase membership retention and growth, Ensweiler noted in his address. The task force, he said, encourages credit unions to:
* Develop more community partnerships; * Continue to push to change laws and regulations in ways that would bolster service to the target markets; and * Increase participation in the REAL Solutions program to offer new products and services to attract more members from low-wealth and modest means households.
Ensweiler advised that with any program meant to reach the target groups for membership the message focus should be one that reflects credit unions “trust, respect, care” of and for members. He also prodded those interested in growth to explore new media options, such as YouTube, Google, MySpace, as well as blogs and more.

Inside Washington (03/03/2008)

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* WASHINGTON (3/4/08)—The Office of the Comptroller of the Currency (OCC) will collect data on national bank mortgage servicers’ loan modification efforts. The OCC is encouraging the servicers to use the HOPE NOW alliance standards to report their efforts. Loss mitigation that preserves homeownership is in the best interest of borrowers, servicers and investors because it is less expensive than foreclosure. The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision were expected to issue similar communications to their institutions, the agency said … * WASHINGTON (3/4/08)—The Office of Federal Housing Enterprise Oversight, Fannie Mae, Freddie Mac and New York State Attorney General Andrew Cuomo have signed agreements to improve appraisal and evaluation services critical to the residential mortgage process. The agreement includes provisions such as eliminating broker-ordered appraisals, reducing the use of appraisals prepared in-house and prohibiting appraisal coercion and creates a complaint hotline for consumers. A Home Valuation Code of Conduct that will apply to lenders selling mortgages to Fannie and Freddie will be effective Jan. 1, 2009. An Independent Valuation Protection Institute also will be created and funded by the enterprises …

CUs should be heard with one voice

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WASHINGTON (3/4/08)--Exiting Credit Union National Association (CUNA) Chairman Allan Kemp McMorris and CUNA President/CEO Dan Mica took the stage at the Annual General Meeting at the Governmental Affairs Conference (GAC) Monday and exhorted credit unions to make themselves heard and to speak with “one voice.” “The most important lesson I’ve learned in my tenure (as chairman) is that the credit union movement is best served when we speak with one voice,” McMorris said. “We must continue to make our voice heard in Washington and in our state capitals.” If credit unions don’t make their voice heard, legislators will only hear bankers’ attacks on credit unions, he said.
Click to view larger imageCLICK FOR A GAC SLIDESHOW) CUNA President/CEO Dan Mica told attendees Monday that the partnership of CUNA, leagues and credit unions joins together to ensure the nation's consumers a strong, robust credit union movement, ready to serve their needs. (Photo provided by CUNA)
He also noted that in the eight years he has spent on the CUNA board, he has appreciated the “limitless power” that is released when people work together. McMorris noted the accomplishments of the membership growth task force. The task force identified strategies for growing membership, including: raising public awareness of the credit union difference, compiling credit union best practices, studying cost efficiencies and examining markets and demographics to help credit unions find ways to better serve members. He also noted the recommendations of the financial literacy task force, including an awards program for credit unions that actively improve member financial literacy. He also touched on PF Interactive, CUNA’s brand new social network for credit union financial leaders, where credit union professionals can share best practices. CUNA's Mica presented a 2007 roundup that highlighted the progress credit unions have made in efforts to “change the conversation” and let credit unions speak for themselves on Capitol Hill and in the media. Mica noted the success of an ongoing communications outreach program started last year. It successfully placed CUNA and other credit union representatives in stories in publications ranging from The Washington Post and the Wall Street Journal, to media outlets such as MarketWatch, Bloomberg TV and Bloomberg Radio. Mica also described how CUNA worked to break through the clutter of messages aimed at Capitol Hill by using “non-traditional” methods to get out the credit union message. He noted the introduction of “The Little Guy,” an iconic character symbolizing who it is that credit unions represent. The Little Guy appeared at least 65,000 times on Capitol Hill last year in the form of buttons, in YouTube videos, as “leave behinds” in congressional visits, ads in Hill publications, street theater, editorial cartoons, t-shirts, mint-tins, and video e-mails. The efforts, Mica emphasized, have culminated in this week’s House Financial Services Committee hearing on credit union regulatory improvements—the “first official, full committee” hearing focusing solely on credit union issues in 10 years.

Dorety elected CUNA Board chairman

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WASHINGTON (3/4/08)--The Credit Union National Association (CUNA) Board elected four of its members yesterday to join new Chairman Tom Dorety on the CUNA Executive Committee. Dorety succeeds outgoing chairman Allan Kemp McMorris, president/CEO of Oakland County CU, Waterford, Mich. Dorety is president/CEO of Suncoast Schools FCU in Tampa, Fla. Other officers are:
* Vice Chairman: Kris Mecham, Deseret First CU, Salt Lake City; * Secretary: Harriet May, president/CEO, GECU, El Paso, Texas; * Treasurer: Mike Mercer, president/CEO, Georgia Credit Union League; and * Executive Committee Member At-large: Patricia Wesenberg, Point Plus CU, Stevens Point, Wis.