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CUNA urges Senate consideration for two CU relief bills

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WASHINGTON (5/20/14)--The Credit Union National Association has written to the Senate Banking Committee, urging its leadership to have the panel consider H.R. 3468 and H.R. 3584, two regulatory relief bills that will have a positive impact on credit unions.
The bills were passed by the House May 6 via a voice vote, were moved to the Senate desk and have been referred to the committee for consideration. CUNA's letter seeks the committee's approval of the two bills, thereby moving them a step closer to becoming law.
H.R. 3468, the Credit Union Share Insurance Fund Parity Act, would extend National Credit Union Share Insurance Fund coverage for trust accounts, including Interest on Lawyer Trust Accounts, even if the account includes funds owned by a credit union nonmember.
"This legislation is necessary because the National Credit Union Administration has interpreted that it does not have authority under the Federal Credit Union Act to extend such coverage," the letter reads. "This legislation would provide coverage on par with the coverage that the FDIC extends to similar accounts held by banks."
H.R. 3584, the Capital Access for Small Community Financial Institutions Act, would correct a drafting error in the Federal Home Loan Bank (FHLB) Act, one that prohibits state-chartered, privately insured credit unions from joining the FHLB system. The passage of the bill would make 132 small, privately insured credit unions eligible for FHLB membership, providing them additional opportunities to provide mortgage credit to their members.
The legislation presents no risk to the FHLB system or the taxpayer because all advances from the
FHLB system must be fully collateralized and subject to their strict uniformly applied standards," the letter reads. "In addition, the bill specifically states that the FHLB will have a superior lien position over any asset that it may hold as collateral, irrespective of how the credit union's deposits are insured."
H.R. 3584 was passed by a unanimous vote in the House, 395-0, and has a companion piece of legislation, S. 1806, in the Senate that was introduced in December by Sen. Sherrod Brown (D-Ohio).

NCUA offers tips for senior financial safety

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ALEXANDRIA, Va. (5/20/14)--With May designated as Older Americans Month, the National Credit Union Administration has released information in its monthly newsletter designed to help seniors and their caregivers avoid "financial injuries."
The NCUA's Pocket Cents program has a section specifically tailored to seniors that includes information on retirement, managing debt, share insurance coverage, online financial security, reverse mortgages, home equity and more. There is also information aimed at preventing elder financial abuse, which includes breakdowns of specific scams that the FBI and other agencies are aware of.
The fact that seniors often have a nest egg, own their own homes and generally have good credit makes them a top-priority target for con artists. Solicitors pushing bogus charities, faulty home repairs, fraudulent health care or medical devices, phony investments and even phantom cemetery plots and funeral services are all schemes that cost seniors an estimated $3 billion per year.
NCUA Chair Debbie Matz, in the May "The NCUA Report," wrote an article aimed at helping seniors avoid fraud, which gives the following tips:
  • Never give out personal or financial information unless you personally initiated the exchange. Particularly sensitive information includes Social Security numbers, account numbers and dates of birth.
  • Never make a commitment on the spot. Take time to discuss any transactions with family members, friends or caregivers.
  • Do not be pressured into signing a document you do not understand.
  • For caregivers: look out for erratic financial transactions in seniors' accounts. This can include large account withdrawals, frequent ATM use and share certificate penalties.
NCUA also recommends that credit unions look into inviting government agencies or nonprofits that can offer free assistance to seniors on retirement, Social Security, health care and other issues. These services can include counseling for low-income seniors at or near retirement age, or an information fair at individual credit union branches.
Use the resource links below for more information.

This week in Congress: three CUNA-backed relief bills set for markup

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WASHINGTON (5/20/14)--Congress will be considering a number of bills this week that would have an impact on credit unions and their members.
The House is scheduled to resume markup on three bills of interest to credit unions Thursday. The issues covered by these bills were raised by the Credit Union National Association in testimony before the Committee last year, and CUNA has sent letters of support for these bills:
  • H.R. 4466, introduced by Reps. Shelley Moore Capito (R-W.V.) and Gregory Meeks (D-N.Y.), would require financial regulators to determine whether new regulations are duplicative or inconsistent with existing Federal regulations;
  • H.R. 4521, introduced by Rep. Blaine Luetkemeyer (R-Mo.), would exempt credit unions and other lenders under $10 billion from certain Real Estate Settlement Procedures Act (RESPA) escrow requirements and exempt mortgage servicers servicing fewer than 20,000 loans from certain RESPA servicing requirements; and,
  • H.R. 2673, introduced by Rep. Andy Barr (R-Ky.), would treat mortgage loans held in portfolio as qualified mortgages.
In addition, House committees will hold hearings on the following bills today:
  • The House Financial Services Committee will hold a full committee hearing on "Examining the Dangers of the Financial Stability Oversight Council Designation Process and its Impact on the U.S. Financial System;" and
  • The House Financial Services subcommittee on housing and insurance will hold a hearing on "Legislative Proposals to Reform Domestic Insurance Policy;" the Insurance Consumer Protection and Solvency Act of 2013 (H.R. 605); the Policyholder Protection Act of 2014 (H.R. 4557); the Risk Retention Modernization Act of 2014; the Insurance Data Protection Act of 2014; and the Insurance Capital Standards Clarification Act of 2014 (H.R.4510).
Hearings on Wednesday include:
  • The House Financial Services subcommittee on oversight and investigations will hold a hearing on "Allegations of Discrimination and Retaliation within the Consumer Financial Protection Bureau, Part Two;"
  • The House Homeland Security subcommittees on counterterrorism and intelligence and on cybersecurity, infrastructure protection and security technologies will hold a joint hearing on "Assessing Persistent and Emerging Cyber Threats to the U.S. Homeland;"
  • The House Financial Services subcommittee on financial institutions and consumer credit  will hold a hearing on "Legislative Proposals to Improve Transparency and Accountability at the CFPB;" and,
  • The Senate Appropriations subcommittee on financial services and general government will hold a hearing on the proposed budget estimates and justification for FY2015 for the Small Business Administration and the Community Development Financial Institutions Fund.
In addition to the House Financial Services markup, hearings on Thursday also include :
  • The House Energy and Commerce subcommittee on commerce, manufacturing and trade  will hold a hearing on legislation to enhance federal and state enforcement of fraudulent patent demand letters; and
  • The Senate Judiciary Committee will hold a full committee markup of the Patent Transparency and Improvements Act of 2013 (S. 1720).

Malware probe results in dozens of arrest

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WASHINGTON (5/20/14)--The U.S. Federal Bureau of Investigation, working with law enforcement officials in about a dozen other countries, have arrested scores of individuals they say are involved with the creation and selling of Blackshades Remote Access Tool (RAT), a malicious computer software that allows its users to gain secret access to a victim's computer.

Blackshades RAT users can access computer files, steal passwords and even activate a computer's webcam to spy on the victim, according to the lawmakers' charges ( Bloomberg May 19).

Bloomberg reported that the government Monday unsealed charges against Alex Yucel, allegedly the owner and operator of the Blackshades website and co-creator of the malware, and four others.  Yucel was reported to be charged with five crimes, which included aggravated identity theft, conspiracy, and access device fraud.  Arrested in Maldova in November, he awaits extradition.

White paper examines impacts of CDFI certification

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WASHINGTON (5/20/14)--The National Federation of Community Development Credit Unions and the Credit Union National Association together have created a white paper to assess the impact of Community Development Financial Institution (CDFI) certification on the performance of credit unions.

The federation has been certified by the U.S. Treasury Department's CDFI Fund since 1996 as the only national intermediary exclusively devoted to CDFI credit unions. Since then, it has served as the leading advocate and provider of technical assistance and consulting services to help credit unions obtain, retain and capitalize on CDFI certification.

The purpose of the Treasury's CDFI program is to use federal resources to invest in CDFIs, including credit unions and banks, and to build their capacity to serve low-income people and communities that lack access to affordable financial products and services.

The paper, prepared by the federation and CUNA's Community Credit Union Committee,  compares CDFI certified credit unions with peer groups of low-income designated and mainstream credit unions and identifies important similarities and differences, using data from the CDFI Fund and NCUA 5300 Call Reports for fiscal years 2009 and 2013. The data was used to analyze the institutional performance and community development profile of 173 credit unions that were CDFI certified as of Dec. 31, 2013.

Several of the paper's key findings include:
  • CDFI credit unions thrive in tough markets. By their nature, CDFI credit unions focus most loans and services in most economically disadvantaged communities, yet the financial growth and performance of CDFI credit unions meets or exceeds that of their mainstream peers. CDFI credit unions offer a greater number and variety of community development products and services than their peers, including credit-builder loans, anti-predatory loans, check-cashing services, bilingual services, financial counseling and more.
  • CDFI credit unions maximize leverage of external resources. From 2009 through 2013, 61 credit unions received $102.7 million in CDFI Financial Assistance grants. During that time, these credit unions increased total assets by $2.4 billion -- a leverage rate of $23.70 for each equity grant dollar added by the CDFI Fund -- and increased total loans by more than $1.5 billion. In addition, 99% of the dollars awarded to credit unions as permanent capital grants from the CDFI Fund are still at work in credit unions.
  • CDFI credit unions are leaders in technology and member services. CDFI credit unions today significantly outpace their peers in the use of high technology for member services. The high-transactional needs of low-income communities pushed CDFI credit unions to lead the way with innovative services such as online and mobile banking, bill payment services, online loan applications and 24/7 access to account information.
  • CDFI credit unions represent a viable business model for community development finance. CDFIs blend financial products with capacity-building services to help members better manage their personal finances; as a result, CDFI credit unions put a higher percentage of their assets to work as loans.
  • CDFI certification is within reach for thousands of credit unions. Nearly half of all credit unions are concentrated in economically distressed census tracts that qualify as CDFI Investment Areas, but that alone does not make them CDFIs. Credit unions that make a strategic decision and take action to address the needs of these underserved communities can become eligible for CDFI certification.
The paper concludes by saying that while a CDFI certification alone will not make a credit union successful, it can be used a building block and to achieve growth and impact underserved markets.

The paper also notes the regulatory benefits enjoyed by CDFI credit unions, such as their exemption from the 12.25% of assets cap on member business loans and from the Consumer Financial Protection Bureau's Ability-to-Repay and Qualified Mortgage requirements for mortgage lenders that took effect in January 2014. It notes that such exemption reflect regulators' recognitions that CDFI credit unions are mission-driven institutions working to provide products and services that meet low-income communities' needs.

Use the resource link below for more information.