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Taxreform.gov Gives CUs New Tax Advocacy Opportunity

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WASHINGTON (5/13/13)--Credit unions now have another avenue to advocate for the credit union tax status: They can post comments to a new U.S. Congress hosted website, taxreform.gov.

The site, which was developed by Senate Finance Committee Chairman Max Baucus (D-Mont.), House Ways and Means Committee Chairman Dave Camp (R-Mich.), and their staff, is intended to give citizens a voice as tax reform discussions continue in Congress. The site also explains the reasons behind current tax reform efforts, and updates readers on the progress of the tax debate.

A tax comment Twitter feed, @simplertaxes, has also been developed.

"No need to travel to Washington. Through the use of social media, we want all Americans to participate directly," the legislators said on the site.

The taxreform.gov site received more than 1,000 comments in its first 12 hours of operation.

The Credit Union National Association has alerted credit unions that the next several weeks will be key as a tax reform package is developed. Executive Vice President of Government Affairs John Magill has noted that credit unions must remain vigilant and be prepared to do what is needed to protect their tax status.

"This is a critical time for credit unions to be educating their members and encouraging them to contact lawmakers to express their support for the value they receive from the credit union tax exemption," he added. Credit unions must use every chance possible to tell lawmakers loudly, early and often that a tax on credit unions is nothing more than a tax on 96 million Americans who are credit union members, Magill said.

CUNA provides a Tax Advocacy Toolkit to its member credit unions to help with their efforts to educate their own members on credit union tax issues.

CUNA members can use the resource link to access the toolkit.

IRS Reminds CUs Of May 15 Form 990 Deadline

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WASHINGTON (5/13/13)--State-chartered credit unions and other tax-exempt organizations must file their 990 forms by May 15 or risk losing their tax-exempt status, the Internal Revenue Service reminded on Friday.

State-chartered credit unions are required to file Form 990 with the IRS annually, although a few states still permit group 990 filings. Federal credit unions are not required to file, since they are not subject to unrelated business income taxes.

"Organizations will see their federal tax exemptions automatically revoked if they have not filed reports for three consecutive years," the IRS wrote.

Small tax-exempt organizations with annual receipts of $50,000 or less can file an electronic notice Form 990-N (e-Postcard). Tax-exempts with annual receipts above $50,000 must file a Form 990 or 990-EZ, depending on their annual receipts. Filing extensions are available.

Use the resource link below for more information.

Comments Due May 25 On CFPB Credit Insurance Rule Delay

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WASHINGTON (5/13/13)--Parties interested in commenting on a proposed delay of the June 1 effective date relating to a prohibition on financing certain credit insurance charges must have their opinions to the Consumer Financial Protection Bureau by May 25.

Last week, the CFPB announced it would seek comment on a proposed delay of the June date. A Friday Federal Register document set the comment date.

The Credit Union National Association has issued a Comment Call seeking credit union views on the delay by May 17.

The CFPB's mortgage loan originator compensation rule contains a provision, as required by the Dodd-Frank Act, which bans the financing of any premiums or fees for payment protection products in connection with certain consumer credit transactions secured by a dwelling. The rule does allow the products to be calculated and paid for in full on a monthly basis.

To ease compliance and help avoid unneeded costs, the Credit Union National Association had urged the CFPB to delay the effective date of any provisions of the final rule that would impact products other than actual single-premium credit insurance, as well as any future rule that will address these issues, until Jan. 10, 2014.  Most of the rest of the mortgage loan originator compensation rule is set to take effect at that time.

JP Morgan Card Practices Draw California AG Action

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LOS ANGELES, Calif. (5/13/13)--California's Attorney General is cracking down on some of JPMorgan Chase & Co.'s questionable credit card practices.

In an enforcement action filed against the bank in Los Angeles Superior Court late last week, California Attorney General Kamala D. Harris alleged that JPMorgan Chase "engaged in fraudulent and unlawful debt-collection practices against tens of thousands of Californians."

Those practices included:

  • Illegally robo-signing litigation filings;
  • Failing to properly notify customers of debt collection lawsuits the bank had filed against them; and
  • Filing legal documents against customers without properly redacting sensitive personal information from the filings, exposing customers to potential identity theft.
"In addition, when asking courts to enter default judgments against consumers, Chase consistently swore under penalty of perjury that the consumers were not on active military duty. In fact, Chase never checked. This deprived servicemembers of important legal protections to which they are entitled while on active duty," the attorney general alleged in a release.

"At nearly every stage of the collection process, Defendants cut corners in the name of speed, cost savings, and their own convenience, providing only the thinnest veneer of legitimacy to their lawsuits," the complaint added.

These practices impacted approximately 100,000 California credit customers over a three-year period, the attorney general said.

"This enforcement action seeks to hold Chase accountable for systematically using illegal tactics to flood California's courts with specious lawsuits against consumers. My office will demand a permanent halt to these practices and redress for borrowers who have been harmed," Harris added.

For the full release, use the resource link.

Cheney Report Comments On CU DDoS Vigilance

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WASHINGTON (5/13/13)--While last week's threatened Distributed Denial of Service (DDoS) cyberattacks did not pan out as anticipated, Credit Union National Association President/CEO Bill Cheney in this week's edition of The Cheney Report said CUNA strongly believes that "maintaining the trust of members in the security of their credit unions is worth the effort of advising credit unions of risks to them and their members."

DDoS attacks are attempts to disrupt or suspend online service by saturating a target's network with external communication requests to overload its server. One dozen credit unions were among the 133 financial institutions and government agencies on a hackers' hit list. The hacker group, OpUSA, indicated that a cyber campaign would be launched "on or about May 7." CUNA warned credit unions of the potential for attacks in late April.

Some websites overseas were temporarily defaced by the hackers, but the 133 U.S. credit unions and banks on the OpUSA target list were unaffected. (Use resource link for May 9 News Now coverage: Websites Defaced, But No Action So Far Vs. U.S. CUs.)

"There were little, if any, widespread attacks on credit unions. We had acknowledged from the beginning that there certainly was the possibility that no threat would, in fact, materialize...And, if our cautions to credit unions played any role in diminishing a threat, so much the better," Cheney wrote in this week's report.

This week's Cheney Report also includes:

  • A tax reform update;
  • News on Fannie Mae and Freddie Mac profits;
  • Details on the CFPB's decision to delay the effective date of its credit insurance rule; and
  • A preview of this week's NCUA board meeting.
Each Friday, The Cheney Report delivers Cheney's insights on three to four key events and policy developments affecting credit unions into the e-mail inboxes of credit union CEOs. The report also provides a valuable window into CUNA's actions on behalf of member credit unions and reinforces the value of CUNA membership.

To sign up for The Cheney Report, click the resource link below and use the "subscribe" tab on the right of the page.

Past issues of The Cheney Report are also archived on cuna.org.