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Senate, House Introduce Exam Fairness Bills

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WASHINGTON (4/16/13)--Legislation that would improve the federal examination process for credit unions and other financial institutions was introduced on Monday, first in the U.S. Senate and then hours later in the House, and Credit Union National Association President/CEO Bill Cheney said the bills "take firm steps in the right direction toward making the examination process fairer and more consistent."

Calling the bills "much-needed legislation," Cheney thanked Sens. Joe Manchin (D-W. Va.) and Jerry Moran (R-Kan.) for introducing S. 727 and Reps. Shelly Moore Capito (R-W.Va.) and Carolyn Maloney (D-N.Y.) for introducing the House bill (HR 1553).

"This legislation would make available to credit unions and other financial institutions the information used by examiners to make decisions in their examination, which is a key concern to credit unions," Cheney said when the bills were introduced.  "In our national exam survey, completed earlier this year, a common concern expressed by credit unions was that examiners tended to focus too much on their own views of best practices, rather than on legal and regulatory requirements."

"Regulators should address the supervision and examination of credit unions in a professional manner, taking into full account legal requirements credit unions must meet as well as the need for credit unions to have reasonable flexibility to serve their members well. These bills take firm steps in the right direction toward making the examination process fairer and more consistent," Cheney added.

The exam fairness bills would:

  • Make available to financial institutions the information used to make decisions in their examination;
  • Codify certain examination policy guidance;
  • Establish an ombudsman at the Federal Financial Institution Examination Council to which financial institutions could raise concerns with respect to their examination; and

Removing legislative and regulatory barriers is one of the key objectives outlined in CUNA's Unite for Good initiative. Unite for Good calls on credit unions to rally in support of a common vision where "Americans choose credit unions as their best financial partner."

For a full list of Unite for Good action steps, use the resource link.

This Week: Reg Reform, Housing On Hearing Schedule

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WASHINGTON (4/16/13)--Financial regulatory reform and housing policy discussions are set to continue in what should be another busy week for the U.S. Congress.

On Tuesday, credit unions will want to watch for a House Financial Services financial institutions and consumer credit subcommittee hearing on community bank regulatory burdens and a House Financial Services oversight and investigations subcommittee hearing on the need to end "Too Big to Fail."

The Wednesday congressional hearing schedule includes:

  • A House Financial Services Committee hearing on impediments to private capital in the housing finance system;
  • A House Financial Services oversight and investigations subcommittee hearing on the Securities and Exchange Commission's failure to implement the Jumpstart Our Business Startups Act;
  • A Senate Banking transportation and community development subcommittee hearing on foreclosure review issues; and
  • A Senate Banking Committee hearing on Federal Housing Finance Agency oversight.
The Joint Economic Committee on Thursday plans to discuss Federal Reserve monetary policy issues. House and Senate budget committees will also hold separate Tuesday hearings on President Barack Obama's 2014 revenue and economic policy proposals.

The Cybersecurity Enhancement Act of 2013 (H.R. 756) and the Cyber Intelligence Sharing and Protection Act (H.R. 624) are likely to be considered by the House this week. The Senate this week has resumed consideration of S. 649, the Safe Communities, Safe Schools Act of 2013.

CUNA to Lawmakers: CU Tax Status Is Dictated By Cooperative Structure

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WASHINGTON (4/16/13)--The Credit Union National Association continues the fight to preserve the credit union tax exemption, and sent a letter Monday responding to a House Ways and Means Committee request that asked stakeholders to outline why their tax treatment under the current code should continue.

In the letter to lawmakers, CUNA again emphasized the positive effects of the credit union tax exemption, and the need to maintain the exemption going forward.

The letter is one of many being sent to House Ways and Means Committee members. "Congress is essentially starting with a blank sheet of paper as it rethinks the current taxation system, and everything is up for consideration," CUNA President/CEO Bill Cheney explained. The CUNA letter, with those of other stakeholders, will be posted on the House Ways and Means Committee website.

The CUNA letter underscored that credit unions were first made tax-exempt by a ruling by the U.S. Attorney General in 1917, and the U.S. Congress conveyed that exemption from federal income tax to state- and federally chartered credit unions because of their ownership structure and special mission. The exemption has been reaffirmed many times, including in 1935, 1936, 1937, 1951 and 1998, the letter noted.

Credit unions' not-for-profit financial cooperative structure allows credit unions to focus totally on member value and service, and, overall, prevents them from taking the types of risks banks take in the name of profits. The not-for-profit structure also creates significant benefits for the nation's 96 million credit union members, including lower rates on loans, lower fees on services, and higher returns on deposits. Non-members also benefit from the exceptional service of credit unions, which keeps competitive pressure on banks, CUNA wrote.

Monday's letter mirrors discussions that Cheney and other CUNA representatives had last week with four members of the powerful tax-policy committee and about 15 staffers. (Use the resource link to read April 12 News Now story: CUNA Supports CU Tax Status At Congressional Staff Briefing)

For the full CUNA letter, use the resource link.

Lengthy Reg Burden List Highlighted In CUNA Reg Advocacy Report

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WASHINGTON (4/16/13)--A chart detailing of the 157 rule changes credit unions have been subjected to since 2008 is one of many key regulatory resources provided in this week's edition of the Credit Union National Association's Regulatory Advocacy Report.

Most of the rule changes, which were made by more than 15 agencies, were written before the Consumer Financial Protection Bureau issued its first rule, the Report notes. Regulations from the National Credit Union Administration, the Federal Housing Administration, the Federal Emergency Management Agency and the CFPB are among those listed in the document.

The impact of these and other regulations on credit unions were addressed in CUNA testimony before a House Financial Services financial institutions subcommittee hearing held last week. (Use the resource link to read April 11 News Now story: CUNA 35-point Plan Could Help Spell Out Relief Bill)

Other issues addressed in CUNA's weekly members-only publication on regulatory developments include:

  • Possible NCUA regulatory actions;
  • Proposed changes to the U.S. Small Business Administration's 504 and 7(a) loan programs;
  • CUNA's comments on National Institute of Standards and Technology data security requirements; and
  • The results of a U.S. Government Accountability Office study on ATM fees.
An updated chart on the CFPB's proposed and final rules is also included in the report.

To see the complete chart of rule changes and to read the full report, employees or volunteers of CUNA and state credit union league member credit unions can sign up below to receive the Regulatory Advocacy Report.

The Regulatory Advocacy Report is archived on

See For Yourself: aSmarterChoice Takes Manhattan

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NEW YORK (4/16/13)--It's green and blue.  It's 26-feet wide and 20-feet high.
Click to view larger image The CBS video billboard in Times Square in New York City is 26-feet wide and 20-feet high and it spreads the word about the benefits of credit union membership.
  And it sings the praises of credit union membership in the middle of New York's most hustling and most bustling of all midtown neighborhoods--Times Square.  It's the credit union video billboard message that the Credit Union National Association has arranged to run hourly on the iconic CBS Screen on famed 42nd Street starting yesterday, April 15, and running through July 4.

"We all know we need to do a better job in spreading the word about credit unions. This is an important step to making our message more visible,"  said Paul Gentile, who is CUNA's executive vice president of strategic communications and engagement. "Credit unions are trusted. Credit unions are a better deal. Credit unions are 'aSmarterChoice' for consumers and we are going to use every tool we can to get that message out. I am confident we will see results from this latest initiative."

The billboard touts the credit union difference in rotating messages displayed in the colors of aSmarterChoice, the consumer website developed by CUNA and the state credit union leagues.

"Need a bank you can trust?  Try a CU.  Better rates. Lower fees. Great service…and no stockholders," the CUNA billboard says.   It then drives viewers to, developed by CUNA and the state credit union leagues to provide a comprehensive credit union locator that includes every credit union in the U.S.  

The billboard's run encompasses the timeframes of CUNA's America's Credit Union Conference in New York City June 30 at the nearby Hilton New York and the tourist-packed  July 4 holiday. Also during the eight-week period, New York will celebrate such high-profile events as the Tribeca Film Festival, Memorial Day, the AIDS Walk, and Father's Day.

Reg Relief Package Develops As CUNA Continues Advocacy

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WASHINGTON (4/15/13)--The Credit Union National Association continues to discuss key regulatory reform ideas with U.S. House Financial Services Committee members as they consider a range of options on how to proceed to provide relief for credit unions and other small financial institutions.

"While it is too early to tell what legislation may look like, there is little doubt that the House is taking a hard look at improving the regulatory environment for small financial institutions," CUNA Vice President of Legislative Affairs Sam Whitfield said Monday.

CUNA, testifying last week at a House Financial Services subcommittee hearing on credit union regulatory relief, released a 35-point action plan for reducing credit union regulatory burdens.  (Use the resource link to read April 11 News Now story: CUNA 35-point Plan Could Help Spell Out Relief Bill.)

Suggestions offered in the CUNA plan include:

  • Increasing National Credit Union Administration budget transparency;
  • Adjusting the treatment of non-owner occupied one- to four-family dwelling loans for credit unions from business loans to residential real estate loans;
  • Increasing the maturity limit for higher education loans made by federal credit unions; and
  • Expanding investment authority in credit union service organizations.
CUNA's Whitfield noted that committee members are looking for areas where credit union and community bank interests may intersect in a bill. CUNA has assured lawmakers that such areas exist;  for instance, one such area is examination fairness legislation.

This week community banks will have a chance to discuss their own regulatory burdens in a House financial institutions subcommittee hearing scheduled for Tuesday.

The recent Senate legislative agenda has been dominated by issues such as immigration reform, nomination hearings and gun laws, and that body has not yet turned its attention to financial institution regulatory relief issues.

Bill Would Slow NFIP Premium Increases

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WASHINGTON (4/16/13)--Legislation to ease the impact of planned National Flood Insurance Program (NFIP) premium increases has been introduced in the U.S. House.

Rep. Frank LoBiondo (R-N.J.) outlined his bill (H.R. 1485) in remarks delivered in the coastal city of Brigantine, N.J. on Monday. Under H.R. 1485, the rate of flood insurance premium increase would be slowed to 12.5% each year for eight years. This rate of premium increase would allow NFIP premiums to still reach "full-risk cost without continuing the taxpayer subsidy but easing the immediate financial impact to Jersey Shore residents and others still rebuilding from Hurricane Sandy," LoBiondo said.

The changes would not only apply to Sandy impacted areas, however. The changes would impact flood-prone areas nationwide.

The lawmaker in a release noted that the Federal Emergency Management Agency has historically charged NFIP premiums of around 40% to 45% of full cost on mortgages for homes in flood-prone areas. Taxpayers subsidize the remaining costs of flood insurance coverage. The Biggert-Waters Flood Insurance Reform Act of 2012, which was signed into law on July 6, would increase these NFIP premiums by 25% per year over a four-year period in a bid to phase out government-subsidized flood insurance. The premium increases do not impact NFIP policies on primary residences.

Lobiondo in a statement said his bill "appropriately balances the goal of making the NFIP solvent with the real financial concerns of those facing steep premium increases and protecting the taxpayers' interest." Rep. Jon Runyan (R-N.J.) is an original cosponsor of the bill, which was introduced on April 11.

The NFIP was established in 1968 and is intended to protect homes and businesses from financial ruin when flooding occurs.

For more on H.R. 1485, use the resource link.