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Go Direct Says Goodbye

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WASHINGTON (3/6/13)--The U.S. Treasury's Go Direct program on Tuesday said goodbye to the Credit Union National Association and all other Go Direct partners.

The Go Direct program was founded in 2005 to promote direct deposit of federal benefits checks ahead of March 1, 2013. All federal benefit payments have been made electronically since that date.

Using electronic delivery, the Go Direct campaign underscored, reduces the risk of identity theft and helps reduce stolen checks and forgeries, as well as decreases the cost to the government of dispersing the benefits.

Go Direct in a final release said efforts to promote direct deposit of federal benefits have resulted in more than 15 million payments now being made electronically. "You have helped to steer millions of people toward safer electronic payments. At the same time, you've saved taxpayers millions of dollars," the Go Direct release said.

CUNA has been a Go Direct partner since 2005, when the program began. 

The Go Direct program will remain active for the time being to help enforce compliance. will also remain active, and a list of frequently asked questions and a toolkit to help interested parties access information on the benefits of direct deposit will remain on that site.

For the full Go Direct website, use the resource link.

CUNA Washington Operating In Continuity Mode

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WASHINGTON (3/6/13)--The Credit Union National Association's Washington office is officially closed Wednesday due to a winter storm emergency declared for the D.C. area. CUNA's key advocacy functions are operating in business continuity mode. CUNA's Madison, Wis. office is open and fully functioning.

FHFA Working On Shared Securitization Structure

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WASHINGTON (3/6/13)--The Federal Housing Finance Agency will begin to build a new securitization infrastructure, including a joint venture to handle mortgage securitization, and contract Fannie Mae and Freddie Mac's dominant presence in the marketplace while simplifying and shrinking some of those firms' operations, FHFA Acting Director Edward DeMarco said.

DeMarco made his remarks before the National Association for Business Economics annual conference this week.

The Credit Union National Association has repeatedly encouraged the FHFA to ensure that any changes to secondary mortgage market structure allow credit unions and other small issuers to maintain full and unrestricted access to that market. CUNA has also highlighted the importance of preserving 30-year, fixed-rate mortgages and ensuring that the secondary market is strong enough to weather economic adversity.

The new structure would be separate from Fannie Mae and Freddie Mac, and will be headed by a CEO and Chairman that are independent from those two government-sponsored entities. The new entity will also accept input from industry participants, DeMarco said. Fannie and Freddie will own the new securitzation business at first, but "the overarching goal is to create something of value that could either be sold or used by policy makers as a foundational element of the mortgage market of the future," DeMarco added.

During this secondary mortgage market restructuring, Fannie and Freddie will maintain their current foreclosure prevention activities and continue to provide credit availability for new and refinanced mortgages, DeMarco said. The steps outlined "should help to set the stage for whatever transition policy makers set forth," he noted.

The U.S. Treasury last summer announced that the winding down of mortgage investment portfolios held by Fannie and Freddie will be accelerated to an annual rate of 15%. The Obama administration is also considering a range of options for mortgage market reform, including almost completely privatizing the housing finance system, limiting the government's intervention in the mortgage market to times of financial distress, and using a system of reinsurance to backstop private mortgage guarantors to a targeted range of mortgages. Congressional hearings on mortgage market reforms have also been held.

For more on DeMarco's recent remarks, use the resource link.

March 12 Is Cordray Nomination Hearing

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WASHINGTON (3/6/13)--Richard Cordray will have his day before the Senate Banking Committee: The current Consumer Financial Protection Bureau director, who was appointed to that position last year, will appear at a March 12 committee hearing on his nomination.

The hearing is scheduled to begin at 10 a.m. (ET). The panel will consider the nomination of Mary Jo White to be a member of the Securities and Exchange Commission at the same time.

In early 2012, President Barack Obama appointed Cordray to lead the CFPB, and he was recently nominated to continue in his role for a five-year term. News Now on Tuesday reported Cordray's confirmation hearing would be held in the next few weeks.

Cordray will face a full Senate vote if his nomination is approved by the committee. The banking committee approved his nomination by a party-line 12-10 vote in late 2011, but he did not receive a full vote in the Senate.

Some Senate Republicans have consistently said they would block any CFPB nominee if certain structural changes were not made to the CFPB. One such change is replacing the director's position with a five-member panel of leadership as a way, supporters say, of making the CFPB's actions more transparent.

Rep. Spencer Bachus (R-Ala.) at last week's Credit Union National Association 2013 Governmental Affairs Conference said the structure of the CFPB could soon be addressed in a bipartisan manner. He noted that House and Senate members are in serious talks to form a bipartisan commission to govern the bureau. "I think that you will find that approach much fairer and less dictatorial," he told credit unions.

Fed Won't Revisit Interchange Cap Rule This Year

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WASHINGTON (3/6/13)--Yesterday the Federal Reserve Board said it does not plan to propose revisions to its debit card interchange fee standard or the fraud-prevention adjustment based on results of its survey of transactions in 2011.

The Fed released its bi-annual published report summarizing information on the volume and value, interchange fee revenue, certain debit card issuer costs, and fraud losses related to debit card transactions in 2011. The report is issued in connection with the Dodd-Frank debit card interchange fee provisions that went into effect in October 2011.

The standard limits debit interchange fees for issuers with assets of $10 billion or more to 21 cents, and allows an additional five basis points per transaction to be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards. Most credit unions are exempt from the fee cap.

The Fed report highlighted information from May that said the average interchange fee per transaction received by exempt issuers declined 4%, from 45 cents to 43 cents after the interchange fee standard became effective Oct. 1, 2011.

Also for exempt issuers, the small decrease in interchange fees was fairly proportional between signature and PIN transactions, according to the Fed's 2011 data.

The Credit Union National Association continues to closely monitor the impact of the interchange cap and whether market forces appear to drive down the fees that the exemption for smaller institutions is intended to protect.

A recent CUNA survey found that per-transaction interchange revenue has declined in five of the six quarters since implementation. Because of these declining rates, total interchange revenue growth slowed considerably after the cap's implementation, and actually declined in the quarter ending in September 2012, the report noted. The third quarter of 2012 is the first full quarter since implementation of the routing and network exclusivity provisions of the rule.

CUNA is concerned that as the routing provisions take hold, there could be further declines not only in per-transaction rates, but also total interchange revenue. 

Also in the report, the Fed said that for issuers covered by the cap, 2011 costs of authorizing, clearing, and settling (ACS) debit card transactions, excluding fraud losses, varied greatly across respondents in 2011. The median issuer had an average ACS cost of 11 cents and the issuer at the 75th percentile had an average ACS cost of 36 cents.

Debit card issuers with the most transactions for the most part had the lowest ACS costs per transaction--reflected in an overall average of 5 cents per transaction. Issuers with the smallest debit card programs, on the other hand, generally had the highest ACS costs per transaction.

The Fed estimated debit-card fraud losses to all parties, that is merchants, cardholders, and issuers, to be $1.38 billion in 2011. The average loss was estimated at approximately 8 bp per debit card transaction, down slightly from 2009.

The median covered issuer's average fraud loss per transaction was nearly 5 bp, the same as in 2009. The median covered issuer had average fraud prevention and data security costs of slightly less than 1.5 cents per transaction, the Fed said.

CUNA Joins The Hill In Event For Committee Leadership

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WASHINGTON (3/6/13)--Joining with The Hill newspaper, the Credit Union National Association was a co-sponsor last night for a special reception for House and Senate members, including committee and subcommittee chairs and ranking members newly appointed for the 113th Congress.

CUNA President/CEO Bill Cheney and CUNA's political and legislative affairs teams joined
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 more than 50 expected lawmakers in the Capitol in a get-to-know-you session beneficial to the House and Senate leaders and credit unions as well.  Credit unions were highlighted at the event when The Hill's organizers thanked CUNA, before the roomful of policymakers, for its role in supporting the event.

The event gave CUNA the opportunity to converse both with longstanding House and Senate members, as well as newly elected officials. The committees represented ranged from House Financial Services and House Oversight and Government Reform to Senate Judiciary and Senate Small Business, to name just a few.

The Hill is a Washington-based newspaper that covers Congress, lobbying and the Capitol Hill community, and circulates broadly among congressional offices and lobbying organizations.

In conjunction with the event last night, the publication ran a CUNA ad proclaiming, in part: FOR MORE THAN 100 YEARS CREDIT UNIONS HAVE FOCUSED ON THEIR MEMBERS…Member‑owned. Member‑trusted. Meeting the needs of working Americans."

CompBlog: Updates On Potential NCUA Actions

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WASHINGTON (3/6/13)--In the February edition of CUNA's CompBlog Wrap-Up, Credit Union National Association Senior Vice President for Compliance Kathy Thompson provides an overview of anticipated National Credit Union Administration actions that were gleaned during the 2013 Governmental Affairs Conference.

In her "What I Heard at the GAC" column, Thompson notes that further explanatory information on troubled debt restructuring will be released by the agency "very soon," and guidance on what recent credit ratings regulations will mean, and what examiners will be looking for, will be released "within two months." The NCUA plans to conduct more document of resolution training for examiners this spring, she adds.

Other regulatory issues that Thompson touches on include:

  • Loan participations;
  • Concentration risk and student loans;
  • Investments supporting employee benefit plans;
  • Enterprise-wide risk management;
  • Prompt corrective action;
  • Derivatives; and
  • Emergency liquidity.
The Wrap-Up also highlights the results of CUNA's recent credit union examination survey and explains how CUNA plans to use the survey results. And, as it does every month, this issue of CompBlog Wrap-Up lists the upcoming effective dates of new regulations, important compliance articles and reports to read, as well as CUNA training programs.

For more of CUNA's CompBlog Wrap-Up, and other compliance gems including an announcement of the 2013 Compies Award winners, use the resource link.

NCUA 4Q Map Details Financial, Membership Gains For CUs

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ALEXANDRIA, Va. (3/6/13)--The National Credit Union Administration's quarterly state-by-state review of the financial performance of federally insured credit unions shows that asset growth in the fourth quarter of 2012 was strongest in two states: Iowa and North Dakota.

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In the fourth quarter, assets held in Iowa credit unions increased by 11.8%, and North Dakota credit union assets increased by 11.5%, the NCUA numbers showed. Nevada was the only state to post a decline in total assets, reporting a 6.5% drop during that time, the NCUA reported.

"Our analysis shows credit unions are growing as the economy improves, making investments in their members and communities," NCUA Chairman Debbie Matz said. The NCUA's state-by-state analysis of credit union conditions "provides important benchmarks on industry performance at the ground level," she added.

The NCUA release also revealed that 44 states and Washington, D.C. reported positive loan growth, with North Dakota leading those states with a reported 15.2% increase. Loans declined in six states and territories, led by Nevada's 13.2% reduction, the NCUA said. The Credit Union National Association's own analysis of credit union financials showed continued growth in the fourth quarter, and found that loan originations and new-auto loans saw dramatic increases in 2012. (See News Now story: Improving Loan Losses, New Auto Loan Growth Fuel Strong CU Earnings)

Return on average assets (ROAA) increased at federally insured credit unions in 45 states and all territories, and the share of credit unions with positive ROAA rose in 41 states and Puerto Rico, the NCUA reported.

The NCUA map also pinpoints which states have contributed to credit unions' recent membership momentum. Fourteen states, including Virginia, Alabama and Washington, saw credit union membership growth rates of greater than 3%. Most states saw their credit union membership grow by at least 1%.

Share and deposit growth and delinquency rates are also addressed in the NCUA release.

For the NCUA maps and an agency release, use the resource link.

Free CUNA 'Pressing Issues' Audio Conference Is Tomorrow

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WASHINGTON (3/6/13)--There is still time to sign up for the Credit Union National Association's March 7 "Pressing Regulatory and Compliance Issues Audio Conference." It is free to affiliated credit unions.

Thursday's session is the first of four related audio conferences CUNA is offering during the year and  CUNA recommends that registrants attend all four to ensure a complete view of the latest regulatory and compliance issues, first-hand.

Tomorrow's program will feature CUNA regulatory, compliance and legislative experts, and topics include:

  • The latest legislative developments affecting credit unions;
  • An update on Consumer Financial Protection Bureau rules, including international remittance transfers, mortgage servicing, ability to repay and originator compensation;
  • National Credit Union Administration issues, including pending proposals and a summary of the February NCUA board meeting;
  • Proposals currently open for comment;
  • The three Reg Z provisions that go into effect June 1, 2013; and
  • The credit agency rating regulation that goes into effect June 11, 2013.
Topics for the spring, summer and fall offerings will be announced as those programs are finalized. Those sessions are scheduled to be held on June 4, Sept. 5 and Dec. 5.

Use the resource link to register.