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CU Online changes detailed in May 15 webinar

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ALEXANDRIA, Va. (5/1/12)--The National Credit Union Administration (NCUA) is offering a free webinar scheduled for May 15 that will outline changes the agency intends to make to its Credit Union Online system will answer questions from credit unions about the innovations.

The CU Online system is a web-based data collection system that allows credit unions to file 5300 call reports and to post profile information.  The NCUA launched CU Online Sept. 1, 2009, and the changes coming in late May are the first major upgrade to the system.

The changes, according to the NCUA, will include an enhanced user interface, the ability to convert call report and profile information into .pdf files, and other basic interface changes that will help users make their call report calculations and avoid leaving information out of their profiles.

"We worked to incorporate the many valuable suggestions we received from credit unions to improve data integrity, enhance security, and make CU Online more user-friendly," said NCUA Examination and Insurance Director Larry Fazio.

The agency also is planning to cease sending paper Call Report notices to credit unions that use the CU Online service, a change that will reduce waste and save the NCUA an estimated $20,000 in paper and postage costs per year.

The webinar is scheduled to begin at 2 p.m. (ET) and will last 90 minutes. Advanced registration is required and the agency plans to archive the webinar on its homepage.

To register for the webinar and read the full NCUA release, use the resource link.

IRS changes to FATCA burden CUs CUNA

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WASHINGTON (5/1/12)--U.S. credit unions should not be subject to any of the Internal Revenue Service's (IRS) recently proposed changes to Foreign Account Tax Compliance Act (FATCA) regulations, as the compliance burdens and overhead costs credit unions would face as a result of these proposed changes would far exceed any benefit to the IRS, the Credit Union National Association (CUNA) said in a Monday comment letter.

The planned FATCA changes are designed to create a tax information reporting and withholding system for certain payments that are made to foreign financial institutions (FFIs) and other entities.

Under the proposed regulations, credit unions and other domestic financial institutions as "withholding agents" would be required to identify members or customers that are FFIs and determine their compliance with FATCA and whether or not they have entered into a reporting agreement with the IRS. Credit unions would also be required to identify members that are foreign entities that are not financial institutions, and be able to verify whether such entities have any substantial U.S. owners.

U.S. credit unions would also be required to identify and withhold on so-called "pass-thru payments" to FFIs involving a transfer of funds to a customer of the FFI that should be subject to withholding, but is not having withholding tax taken out of their account.

Credit unions are concerned that the proposal would impose new compliance requirements on them at a time when credit unions are already subject to a range of additional regulatory responsibilities from a variety of other agencies, the letter said.

To cope with the FATCA changes, credit unions would need to establish procedures and practices, including staff training, for ongoing identification of covered entities and transactions, and take additional steps to ensure they met their reporting and withholding compliance responsibilities when facing transactions that come under IRS regulations.

CUNA said Congress did not appear to have credit unions in mind when it developed the FATCA provisions, and urged the IRS to "weigh the minimal benefits related to reporting and withholding that might be obtained from applying these requirements to U.S. credit unions."

The IRS should exempt domestic financial institutions from the requirements, CUNA said. At a minimum, CUNA added, the IRS could exempt remittance transfers from the reporting requirements of the final rule.

For the full comment letter, use the resource link.

Inside Washington (04/30/2012)

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  • WASHINGTON (5/1/12)--The Federal Housing Finance Agency (FHFA) is no longer expected to announce a decision on whether to allow principal reductions on Fannie Mae and Freddie Mac loans by the end of the month as expected, an agency spokeswoman said Friday. A decision will not be made until the FHFA concludes its principal forgiveness analysis and discussions with the Department of the Treasury, the spokeswoman said. The agency did not specify a new target date for its decision. Some observers have cited write-downs as the most effective way to resolve bad credits and to avoid mass foreclosures, but FHFA Acting Director Edward DeMarco earlier this year indicated that forbearance plans and short sales already serve as forms of principal reduction without saddling taxpayers with further losses, and has also spoken in favor of principal forbearance. (American Banker April 30). Credit Union National Association Deputy General Counsel Mary Mitchell Dunn has said the FHFA's decision to delay the principal reduction decision is "not surprising," considering DeMarco was somewhat critical of principal reduction in recent comments. DeMarco earlier this year said a principal reduction program, if offered, would likely impact a fraction of the estimated 11 million underwater borrowers in the country today. The larger group of underwater borrowers who have remained faithful to paying their mortgage obligations are a greater risk to housing markets and taxpayers, he added. Encouraging their continued success could have a greater positive impact on the recovery of housing markets, he said…
  • WASHINGTON (5/1/12)--The Consumer Financial Protection Bureau's decision to scale back proposed limits on credit card fees is being complimented by industry observers, despite some initial criticism from the media and consumer advocacy groups (American Banker April 30). The CFPB inherited a rule from the Federal Reserve Board that proposed limits on credit card fees prior to the opening of an account. A federal judge said the provision wasn't authorized by the law. The agency decided to strip the provision in its own proposal on the issue, rather than prolonging the issue in court.  Jo Ann Barefoot, a co-chairman of Treliant Risk Advisors, said the decision shows the CFPB is willing to focus on areas where it will have the biggest impact. The agency has a busy regulatory agenda in upcoming months, including the release of the qualified mortgage rule, which requires lenders to verify a borrower's ability to repay a loan unless it meets certain requirements. Isaac Boltansky, a policy analyst with Compass Point Research & Trading, said the CFPB showed restraint in scaling back the proposed limit on credit card fess to avoid fighting battles on multiple fronts …
  • WASHINGTON (5/1/12)--Stuart Ishimaru has been selected to head the  Consumer Financial Protection Bureau's (CFPB) newly established Office of Minority and Women Inclusion (OMWI), which will work to promote diversity at the CFPB and at the financial institutions it regulates.  Ishimaru's experience includes leading the U.S. Equal Employment Opportunity Commission, and serving in senior positions in the Civil Rights Division at the Department of Justice, and the Commission on Civil Rights. His work was often geared toward creating policies to foster diversity in the workplace and creating opportunities for women and minorities in contracting jobs.  The Dodd-Frank Wall Street Reform and Consumer Protection Act requires the CFPB to establish the OMWI …

CFPB receives 1800 advisory board nominations

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WASHINGTON (5/1/12)--More than 1,800 people contacted the Consumer Financial Protection Bureau (CFPB) regarding nominations for membership to the bureau's Consumer Advisory Board (CAB), according to a communication sent to nominees and those who nominated them.

The CFPB said it will review each nomination and then select a group of "knowledgeable, experienced and committed individuals; representing a diversity of perspectives and backgrounds, to serve the consumer interest."

The CFPB is developing the consumer advisory panel to help keep abreast of emerging trends and practices in the financial services and products industry.

Credit union officials and their representatives are among those nominated. The Credit Union National Association (CUNA) has met with several CFPB officials to work to ensure credit union candidates are given full consideration for the board.

CUNA submitted a list of 28 nominees from credit unions across the country. CUNA President/CEO Bill Cheney indicated at the time that the work of the advisory board will be enhanced if members are from credit unions or credit union leagues.

CUNA also has encouraged the bureau to proceed with assembling its planned Credit Union Advisory Council. CUNA urged that nominees that are not accepted for the consumer board be considered for the CFPB's credit union advisory board.

The CFPB communication to CAB nominees said a further public status update will not be made until the final board is selected. However, nominees selected as semi-finalists will participate in a phone interview and be required to complete a financial disclosure.

Postal reform OKd before District Work Break

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WASHINGTON (5/1/12)--Before members of the U.S. House and Senate returned to their home districts for this week's district work break, the Senate passed the 21st Century Postal Service Act of 2012 (S. 1789) by a 62 to 37 vote.

The bill would reduce postal service days from six to five and, of greater interest to credit unions since it could affect operational costs to some degree, give the U.S. Postal Service (USPS) more flexibility in how it increases its rates.

The bill would also require the postal service to consider how certain office location changes would impact small and rural communities, and to alter postal employee compensation and benefit structure in some cases.

These and other moves are bids to cut costs and increase revenues. USPS earlier this year moved forward with a one-cent increase in first-class mail rates, bringing that rate to 45 cents.