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Washington Archive

Washington

CUNA In CU Insight: 96 Million Voices Can Back CUs In Tax Battle

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WASHINGTON (5/2/13)--Ninety-six million members' voices could potentially be heard in support of credit unions as Capitol Hill tax reform discussions continue in the coming weeks, Credit Union National Association Executive Vice President of Strategic Communications Paul Gentile wrote in a Wednesday CUinsight.com editorial. The more credit unions educate their members on tax issues, Gentile noted, the more likely members are to communicate their support for credit unions.

"If all members knew that for every $1 of their tax exemption, $10 goes back to consumers in better rates and lower fees, it would be a lot easier to get members to advocate for the exemption and as importantly, to reinforce why they do business at a credit union," Gentile wrote.

However, some members don't understand which taxes credit unions do and do not pay, and most may not be aware of the credit union tax exemption, he warned. "CUNA's own research shows that the more credit union members understand the value of the tax exemption, the more likely they are to proactively take action to protect it."

The Senate Finance Committee and House Ways & Means Committee are both studying comprehensive tax reform.

"No one, other than the bankers, is targeting the credit union tax exemption," Gentile said. However, all tax preferences are on the table, and "the status of the credit union tax exemption can't really be defined one way or the other.

"That alone is cause for vigilance," Gentile wrote.

So, how can credit unions reach out and educate their members? Overall, Gentile said, credit unions must get more comfortable with messaging their members about their structure. He pointed out that CUNA's Tax Advocacy Toolkit, which includes sample newsletter articles, advertisements, op-eds, and other messaging resources, gives credit unions a great start. Social media such as Twitter and Facebook provides another avenue for credit unions to tell their story to members.

"CUNA is aggressively monitoring the tax reform discussion on the Hill and is actively engaged with lawmakers on the issue, but credit union members are our most powerful advocate. If credit unions can drive home the message of credit union value, we will not only be able to advocate for the exemption but for other proactive legislative issues down the line," Gentile said.

Gentile noted that CUNA launched a new vision for the credit union system in February: "Americans Choose Credit Unions as Their Best Financial Partner."

"We feel strongly that if the system unites together and Unites for Good, we can make that vision a reality. By educating your members on the value of the credit union structure, you can play a key role in moving that vision forward," he concluded.

For the full op-ed and more on CUNA's Tax Toolkit and strategic vision for the credit union system, use the resource links.

House Financial Services Releases May Hearing List

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WASHINGTON (5/2/13)--The May hearing schedule for the House Financial Services Committee, released Wednesday, kicks off with a May 7 mark up session by the full committee on a series of bills related to Title VII of the Dodd-Frank Act and the Jumpstart Our Business Startups Act--or JOBS Act.

The legislation, the subject of subcommittee hearings last month, is intended, in part, to address unintended consequences of the derivatives provisions of the Dodd-Frank Act and to Require the Securities and Exchange Commission to conduct cost-benefit analyses of regulations. The mark up starts at 10 a.m. (ET).

The rest of the committee's hearing schedule, which is tentative at this point and may require changes, includes:

  • A May 8, 2 p.m. (ET) hearing by the subcommittee on monetary policy and trade on the reauthorization of the Defense Production Act, which has been in effect since 1950 with periodic reauthorizations;
  • A May 15, 2 p.m. (ET) hearing by the subcommittee on capital markets and government-sponsored enterprises on the structure and costs of the GSEs;
  • A May 16, 10 a.m. (ET) oversight hearing by the full committee with SEC Chair Mary Jo White; and
  • A May 16, 2 p.m. (ET) hearing by the subcommittee on housing and insurance on multi-family housing finance.
Witnesses for each hearing will be announced at later dates. These hearings will take place in Room 2128 of the Rayburn House Office Building.

 
 

FHFA Nominee Knows CU Issues

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WASHINGTON (5/2/13)--Rep. Mel Watt (D-N.C.), President Barack Obama's nominee to serve as the next Federal Housing Finance Agency director, "has a strong understanding of financial services issues and has been willing to listen to credit unions and consider our issues throughout the years," Credit Union National Association President/CEO Bill Cheney said Wednesday.

North Carolina Credit Union League President/CEO John Radebaugh congratulated Watt on his nomination, which was announced by Obama on Wednesday. "Through the years, credit union advocates in North Carolina have appreciated the opportunity to work with him on a variety of issues of importance to the movement. He's very qualified for the position and we wish him well through the confirmation process," Radebaugh said.

Watt has served in the U.S. Congress since 1992, and is a veteran member of the House Financial Services Committee. If confirmed by the Senate, he would replace FHFA Acting Director Edward DeMarco, who has led that agency since Sept. 1, 2009.

Many in Congress have called for Obama to remove DeMarco and nominate a replacement. Obama in 2011 nominated former North Carolina bank commissioner Joseph Smith to serve as full-time director, but that nomination was not confirmed.

Demarco last year caused consternation for many in Congress when he objected to allowing Fannie Mae and Freddie Mac to pursue a broad principal forgiveness program for troubled homeowners. House Democrats in a February 2013 letter to Obama said the FHFA has been directed by Congress to maximize assistance for homeowners and minimize foreclosures. The agency has also been granted explicit authority to modify mortgage loans through loan principal reductions, the legislators wrote.

"Ensuring that FHFA implements congressional directives to support the most liquid, efficient, competitive, and resilient housing finance markets is a matter of national urgency," they added. They urged Obama "to nominate an FHFA director who is ready to fulfill this mission and address the many challenges still facing the nation's housing finance markets." Forty-five Democrats co-signed the letter.

A range of housing policy changes has been discussed by the U.S. House, the Senate, and the Obama administration in recent months, including full market privatization, limiting government market intervention, and several stops in between. (Use the resource links for News Now coverage of mortgage market reform efforts.)

Ensuring that credit union interests are represented in any reform of the housing finance system is one of CUNA's top 2013 legislative objectives. CUNA has repeatedly said that any changes to secondary mortgage market structure must 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.

NCUA Newsletter Educates New LICUs On Secondary Capital

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ALEXANDRIA, Va. (5/2/13)--As the number of low-income designated credit unions (LICUs) increases, the National Credit Union Administration's Office of Small Credit Union Initiatives (OSCUI) is working to inform these new LICUs of the benefits of their new status, including their new-found access to secondary capital.

The LICU designation brings benefits that include the ability to accept supplemental capital and an exemption from the member business lending cap under certain circumstances. LICU-designated credit unions are also eligible for Community Development Revolving Loan Fund grants and low-interest loans and may accept deposits from non-members.

OSCUI said it would provide details on secondary capital benefits in the next three installments of the monthly FOCUS e-Newsletter. This month, the agency outlined general secondary capital information, including:
  • Borrowing limitations for federal credit unions;
  • NCUA ''Secondary Capital Plan'' approval;
  • Secondary capital account contract agreements; and
  • Capitalization requirements.
Future secondary capital columns will address proper accounting treatment and prompt corrective action considerations, OSCUI said.

The NCUA in August notified 1,003 credit unions of their eligibility for the LICU designation. Those credit unions were offered a streamlined LICU application process, and many accepted the NCUA designation.

The agency and the National Association of State Credit Union Supervisors have also announced joint efforts to streamline the process for state-chartered credit unions to determine if they are eligible for a LICU designation. (Use the resource link to read April 22 News Now story: NCUA Letters Address LICU, Corporate Credit Risk Issues)

There are currently 1,927 LICUs, according to the NCUA.

For this month's FOCUS, use the resource link.

Lawson Appointed To FFIEC State Liaison Committee

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WASHINGTON (5/2/13)--Michigan Department of Insurance and Financial Services Banking Office Director Karen Lawson has been appointed to a two-year term on the Federal Financial Institutions Examination Council's (FFIEC) five-member State Liaison Committee (SLC).

Lawson replaces Charles Vice, Commissioner of the Kentucky Department of Financial Institutions, on the panel.

The SLC is a five-member panel of state financial regulatory agencies that works to encourage the application of uniform examination principles and standards by state and federal agencies and allows state regulators to participate in the development of those principles and standards.

The SLC consists of five representatives of state financial institution regulatory agencies, and members are designated from the Conference of State Bank Supervisors, the American Council of State Savings Supervisors, the National Association of State Credit Union Supervisors, and the FFIEC for two-year terms.

The FFIEC is comprised of the leaders of the National Credit Union Administration, the Federal Reserve Board, the office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Deposit Insurance Corp.

For the full release, use the resource link.