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Mica New day for CUs is now

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WASHINGTON (3/5/08)--Citing recent advancements for credit union legislation in Washington, D.C., Credit Union National Association (CUNA) President/CEO Dan Mica declared it the “beginning of a new day” during Tuesday’s opening session at the Governmental Affairs Conference (GAC) here. “It’s the beginning of a new day for credit unions,” Mica said referring to the Credit Union Regulatory Relief Act (CURRA, (H.R. 5519), which was introduced Monday by Reps. Paul Kanjorski (D-Pa.), and Ed Royce (R-Calif.). If enacted, the bill would be the biggest change in the credit union movement in the ten years since H.R. 1151, according to Mica, and it touches on many of the provisions in the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). CURIA currently has 145 co-sponsors. Mica, however, stressed to his audience of more than 4,500 credit union representatives, that although CURRA “will give us some relief,” credit unions must “keep pushing CURIA.” Credit unions need to continue delivering their message to Capitol Hill, particularly in the face of increasing negative pressures form the banking industry, he said. Mica said the relentless attacks on credit unions from bankers represents “true zealotry.” Mica urged credit union involvement both in the upcoming presidential election and in helping those affected by the subprime mortgage debacle. “This is the year we need to get out there and get active,” he said. He emphasized the value of credit unions helping those affected by problem subprime mortgage loans, noting that while credit unions did not cause the problems, they can be a part of the solution. People look for safety, security, compassion and someone they can work with and trust, and credit unions have come out as an entity that people can trust, the CUNA leader said.

Hood says its prime time to show CU difference

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WASHINGTON (3/5/07)—National Credit Union Administration (NCUA) Vice Chairman Rodney Hood Tuesday said the time is ripe for credit unions to demonstrate how different they are from other financial services providers. “Credit unions were not part of the subprime mortgage debacle, I’m proud to report,” Hood said during the general session of the Credit Union National Association’s Governmental Affairs Conference held here. “You’ve placed the needs of members above exotic mortgages,” Hood said, encouraging credit unions to make capital available and affordable “to those who need it most, when they need it most.” Hood also said all credit unions, regardless of size, must adopt enterprise risk management to enhance their balance sheets and remain viable. He announced that the NCUA will host an enterprise risk management summit Aug. 7 in Chicago for smaller credit unions. The NCUA vice chairman also pledged to work the rest of his term to clarify and simplify field of membership (FOM) provisions, declaring that the agency shouldn’t shy away from FOM extensions for community credit unions and underserved areas. In this economic environment, “the risks and challenges are many,” Hood concluded. “So are the opportunities."

Ret. Gen. Powells CU education

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WASHINGTON (3/5/08)--Former Secretary of State and retired Gen. Colin Powell said that when he was a young man, credit unions gave him a much-needed financial education. Addressing the 2008 Credit Union National Association (CUNA)
Click to view larger image Addressing the 2008 CUNA GAC, Former Secretary of State and retired Gen. Colin Powell said he was once “one of those ‘little guys’” that credit unions help. The reference was to CUNA’s “Little Guy,” an iconic character used to represent the average working Americans that credit unions serve. (Photo provided by CUNA)
Governmental Affairs Conference, Powell said he was once “one of those ‘little guys’” that credit unions help. The reference was to CUNA’s “Little Guy,” an iconic character used to represent the average working Americans that credit unions serve. Powell said that before joining a credit union, he knew nothing about car loans or mortgages, but his credit union changed that for him. During these times when members are concerned about mortgages and the economy, “you are the one thing people can count on--a safety net, and I thank you for the service you provide,” he said. Since leaving the Bush administration, the four-star general said he has found himself mastering the fine art of retirement—once again. Powell said he also spends time working with a venture capital business finding solutions to biotechnical, green energy, and health-care issues. Retirement has also meant, he said, that he can fully support more causes, such as raising funds for an educational center at the Vietnam Veteran’s Memorial, and the Martin Luther King Jr. Memorial. Powell also acknowledged that credit unions raised $1.2 million to support the MLK, Jr. memorial.

Hyland Exec pay was task force hot button

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WASHINGTON (3/5/08)—National Credit Union Administration (NCUA) board member Gigi Hyland said Tuesday that if there was a “hot button” topic as her agency gathered information for its Outreach Task Force, it was whether or not information should be gathered or revealed on senior executive officer compensation. Hyland, addressing the Credit Union National Association’s (CUNA) Governmental Affairs conference, said credit unions identified privacy issues and regulatory burden as among their primary concerns related to the subject. She noted, however, that the cross-industry direction of public policy in this area is toward disclosures of executive compensation. In fact, the task force report pointed out that increased transparency of executive compensation would improve "accountability and be more consistent with the prevailing public policy." Hyland detailed the recent Outreach Task Force report--unveiled last week. She noted that the 85-page report carries 12 recommendations allocated to three areas in addition to compensation reports: Membership profile and financial services; low-income definition; and NCUA outreach. Hyland, who chaired the task force, said only two of the recommendations would require public notice and board action. But she underscored that the process begun by the task force is far from over. The fact-finding group spent about a year delving into internal information within the agency as well as conducting Town Hall-style meetings to gain insights from the credit union movement. Now that the report has been issued, Hyland said, the three members of the NCUA board must digest and discuss the recommendations prior to deciding what actions to take.

Johnson testifies on state of CU industry

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WASHINGTON (3/5/08)--National Credit Union Administration (NCUA) Chairman JoAnn Johnson testified Tuesday that federally insured credit unions are well capitalized with net worth at 11.4%, total assets of $753 billion, and aggregate net worth of $86 billion, the highest dollar amount in history. She joined federal and state financial regulators testifying before the Senate Banking Committee on “The State of the Banking Industry”. Johnson also addressed foreclosure mitigation efforts, systemic risk, transparency, and risk management techniques being applied to enhance safety and soundness throughout the credit union industry. “NCUA data collection and financial trend monitoring, extensive examination procedures, and strong mortgage lending and risk management guidance in the form of letters to credit unions have been crucial in ensuring the federally chartered credit union system remains financially strong in the midst of real challenges in the mortgage market,” Johnson told the Senate panel. Johnson stressed that riskier nontraditional loans are not prevalent at federally insured credit unions. She noted that 58% of credit union mortgage loans are fixed rate and only 2.3% are interest-only or optional-payment loans. The chairman of the committee, Rep. Christopher Dodd (D-Conn.), pushed the federal banking regulators on whether new international banking capital standards would be sufficient in the aftermath of the subprime mortgage meltdown. (CongressDailyPM, March 4). The chairman expressed concern that proposed Basel II rules could exacerbate problems, as some analysts have observed, because of a greater emphasis on a bank's internal models to assess risk and determine capital when those institutions might want to seek greater profits by minimizing any risk exposure in their modeling.

Inside Washington (03/04/2008)

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* WASHINGTON (3/5/08)—No bank will be ready for Basel II when it goes into effect April 1, said Comptroller of the Currency John Dugan Monday (American Banker March 4). The 12 largest banks in the U.S. have to notify their supervisors two months before switching to it, and the Office of the Comptroller of the Currency has not received any notifications yet, he said … * WASHINGTON (3/5/08)—The Ways and Means Committee is being pressured by the House Financial Services Committee to push legislation that would let the Federal Home Loan Banks place guarantees on tax-exempt bonds (American Banker March 4). Because the legislation would raise debt ratings, it could lower costs for municipal borrowing, said members of the House Financial Services committee. The committee sent a letter to Rep. Jim McCrery (R-La.), and House Ways and Means Committee Charles Rangel (D-N.Y.), Ways and Means chairman, encouraging them to act on the legislation … * WASHINGTON (3/5/08)—A Government Accountability Office (GAO) report requested by Rep. Carolyn Maloney (D-N.Y.) indicated that bank fees are increasing and are often kept from consumers. The report indicated that bank fees, on average, are higher than credit union fees. Maloney, who has introduced a bill that would crack down on overdraft fees by allowing consumers to adopt overdraft protection, noted that it’s troubling that many consumers do not have adequate information regarding account terms before they open an account. “The free market works properly when consumers know the terms of a contract and can make informed choices based on complete and accurate information,” she said …

Dorety High-impact projects right for CUs

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WASHINGTON (3/5/08)--New Credit Union National Association (CUNA) Board Chairman Tom Dorety
Click to view larger image (CLICK FOR SLIDESHOW) New CUNA Board Chairman Tom Dorety Tuesday said “many credit unions see the wisdom that serving working-class people can benefit those people and the net income of credit unions.” Dorety is president/CEO of Suncoast Schools FCU, Tampa, Fla. (Photo provided by CUNA)
Tuesday challenged credit unions to support high-impact community projects to raise awareness of credit unions among public leaders. Highlighting the importance of credit unions' involvement, Dorety cited the 2008 Herb Wegner Memorial Award Winners: State Employees’ Credit Union Foundation; Harriet May, CEO of GECU of El Paso, Texas; and Bob Hoel, former Filene Research Institute executive director. Dorety, CEO of Suncoast Schools FCU. Tampa, Fla., was addressing CUNA’s 2008 Governmental Affairs Conference here. Few credit unions could raise more than $7 million as State Employees’ Credit Union Foundation has done, Dorety noted. But he advised that as a percentage of assets that amount is equivalent to $50,000 for a $100 million-asset credit union and $5,000 for a $10 million-asset credit union. “If all credit unions did that, think of the good we could do,” he said. Dorety said it would be “foolish” to oppose Congress’ and regulators’ efforts to hold credit unions accountable for their H.R. 1151-mandated mission to serve people of modest means. Fortunately, he added, “many credit unions see the wisdom that serving working-class people can benefit those people and the net income of credit unions.” And, he added, doing so helps credit unions connect with their members.