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Washington Archive

Washington

New small CU deputy director is appointed

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ALEXANDRIA, Va. (4/19/12)--Credit union veteran Martha Ninichuk will take on the role of deputy director of the National Credit Union Administration's (NCUA) Office of Small Credit Union Initiative (OSCUI) on Sunday, the agency has announced.

Ninichuk most recently served as the Michigan Credit Union League's director of cooperative initiatives, and has also worked with the Maryland and D.C. Credit Union Association.

Her work has focused on helping credit unions provide innovative financial products and services to underserved and low-income populations, addressing governance issues, and developing financial products, the NCUA noted.

She also led Warren, Michigan-based St. Cletus CU.

NCUA Chairman Debbie Matz said Ninichuk's "mix of small credit union management and broad credit union field work is ideal for this hands-on position" and added that her "wide range of experiences, from running a small credit union in Michigan, to consulting for two state leagues, to international credit union development projects, will also bring fresh perspectives to OSCUI's work."

For the NCUA release, use the resource link.

CFPB to target credit discrimination

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WASHINGTON (4/19/12)--The Consumer Financial Protection Bureau (CFPB) will "combat unlawful, discriminatory practices--including those that have an illegal disparate impact on protected borrowers," and examine mortgage lending, student lending, auto lending, and credit card practices for evidence of lending discrimination, the agency said on Wednesday.

The CFPB in its bulletin 2012-04 said it would continue to adhere to the fair lending principles outlined in Regulation B, which implements the Equal Credit Opportunity Act (ECOA). ECOA bans creditors from discriminating against credit applicants based on their race, color, religion, national origin, sex, marital status, and other select factors.

In the bulletin, the CFPB said it would employ the legal doctrine of "disparate impact" as it exercises its supervision and enforcement authority to enforce compliance with the ECOA and Reg B.

According to the CFPB, lending policies that seem evenhanded but have a disproportionate, negative effect on a group that is protected under ECOA are said to have a "disparate impact," and "are unlawful unless they meet a legitimate business need that can't be met by an alternative that has a less disparate impact."

"Discrimination that disparately impacts borrowers in violation of the law hurts consumers and can threaten the economic stability of our communities," and "that is why the law has long recognized this form of unlawful credit discrimination," the CFPB said.

For the CFPB release, use the resource link.

Inside Washington (04/18/2012)

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  • WASHINGTON (4/19/12)--Republican lawmakers were more even-handed Tuesday in their remarks about how the Securities and Exchange Commission (SEC) is making improvements to its economic analysis of proposed new Dodd-Frank Act regulations. Republican lawmakers have criticized regulators for not accounting for the true cost of regulations associated with Dodd-Frank-related rules. At a hearing on Tuesday, Rep. Patrick McHenry (R-N.C.) said he was hopeful the SEC's cost-benefit analysis of the regulations would lead to an improved decision-making process. The SEC's March 16 memo followed a July 2011 appeals court ruling that cited the agency for not properly conducting a cost-benefit analysis before finalizing a rule required by Dodd-Frank. A January 2012 report by the SEC's inspector general also criticized the agency's method of analysis …
  • WASHINGTON (4/19/12)--In his first speech as comptroller of the currency, Thomas Curry stressed the Office of Comptroller of Currency's (OCC) role as its relates to community banks and small-business lending.  Small business and community banking are primarily locally focused, said Curry, speaking before a small business summit in Washington. "While the major share of small-business lending is done by large and midsize banks and thrifts, it's important to remember that small business is an intensely local undertaking, as is community banking," he said. "From our position as a nationwide regulator, the OCC brings significant resources and expertise to the table. But our local presence in communities throughout the country provides an equally important perspective." Local banks and thrifts are in the best position to make credit decisions about the small businesses in their communities, Curry said. "We won't try to substitute our judgment for that of the bank, nor will we discourage banks and thrifts from making creditworthy loans to small businesses," he added. "In fact, we and the other federal banking agencies have consistently encouraged the institutions we supervise to make loans to creditworthy borrowers, especially in difficult times " …

CFA asks senators to support MBL cap increase

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WASHINGTON (4/19/12)--The Consumer Federation of America (CFA) has joined the list of organizations that support a member business lending (MBL) authority increase for credit unions, telling senators that the Small Business Lending Enhancement Act of 2012 (S. 2231) would "expand access to affordable credit for small businesses and help strengthen local marketplaces that serve consumers well."

S. 2231, which is expected to come up for a Senate vote soon, would increase the MBL cap from 12.25% of assets to 27.5%. The Credit Union National Association (CUNA) has estimated that lifting the MBL cap from 12.25% to 27.5% of assets would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

CFA Executive Director Stephen Brobeck in a letter to members of the Senate said MBL cap increase legislation "would be particularly beneficial at this time," and would "benefit consumers both by promoting competition and innovation in local marketplaces and by strengthening credit unions."

Moreover, to the extent new jobs were created, some consumers would gain additional income, the letter said.

"Credit unions are especially deserving of this opportunity" and "have a strong record of serving consumer and communities, especially moderate-income areas that have been particularly hard-hit by the recession." Credit unions also "have had much past success in providing low-cost, sustainable credit to consumers and small businesses," and would "be able to invest in loans that likely will increase credit union earnings, capital contributions, and overall safety and soundness, directly benefitting all credit union members," if greater MBL authority is given to them, the letter added.

The National Cooperative Business Association (NCBA) earlier this month asked members of the cooperative community to communicate the crucial funding needs of small businesses, and the importance of supporting MBL cap increase legislation, to members of the U.S. Congress.  A number of other groups have also stepped up to back credit unions and an MBL cap increase. (See related April 4 News Now story: NCBA urges members to call for MBL bill support)

Those organizations include the National Council of Textile Organizations, the American Small Business Chamber of Commerce, the National Farmers Union, the National Association of Realtors, the Realtors Land Institute, the Small Business Majority, the Society of Industrial and Office Realtors, the CCIM Institute, Americans for Tax Reform, the American Consumer Institute, the Hardwood Federation, the Institute of Real Estate Management, NCB Capital Impact MultiFunding, the National Association of Home Builders, the National Association of Professional Insurance Agents, AMT--The Association for Manufacturing Technology, the U.S. Women's Chamber of Commerce, and the Heartland Institute.

NCUA report notes CU burden in diversity standards

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ALEXANDRIA, Va. (4/19/12)--The administrative burden on credit unions will be taken into account as new diversity standards are developed, since "credit unions face some challenges in developing diversity policies and programs," the National Credit Union Administration's (NCUA) Office of Minority and Women Inclusion (OMWI) said in its yearly report to Congress.

Section 342 of the Dodd-Frank Wall Street Reform Act requires the NCUA and other federal regulators to create standards to assess the work force diversity policies and practices of their regulated institutions, and OMWI, which began its work last year, is in charge of developing the NCUA's diversity policy. The NCUA and other regulators are still developing these policies and rules on how they will develop these standards.

The Credit Union National Association (CUNA) in a letter sent to the NCUA late last month urged the agency to implement diversity standards "in a manner that would minimize the information gathering and reporting burden on credit unions." (See related March 28 News Now story: Avoid CU burdens in diversity policy: CUNA to NCUA)

OMWI in its annual report noted that credit unions have suggested applying the diversity standards only to "large credit unions with sufficient resources."  The agency said that some credit unions may face challenges in developing their own diversity policies and programs, as their limited number of employees, geographic location, and field of membership may limit their opportunities to truly diversify their own staff.

The office added credit unions have offered various suggestions to NCUA on how to implement the diversity policy assessment standards, such as developing diversity best practices and model diversity standards that credit unions could use as guides, and allowing credit unions to perform self-assessments of their own diversity practices.

The NCUA also said credit unions have requested NCUA use Equal Employment Opportunity Commission data to gauge credit union diversity compliance, in some cases.

OMWI also noted that its own efforts to work with a more diverse group of outside contractors have had positive results, with the NCUA's changes to procurement practices resulted in the amount of contracting dollars that were awarded to women- and minority-owned businesses doubling between 2010 and 2011.

For the full NCUA report, use the resource link. See particularly Part III on "Regulated Entities."