WASHINGTON (5/22/12)—The Credit Union National Association's (CUNA) high-level work on behalf of credit unions was highlighted this week in a front-page Washington Post item on the influence of lobbying groups in Washington.
The fight to increase the credit union member business lending (MBL) cap was addressed in the Post story, as a December 2010 meeting between Obama Administration economic adviser Larry Summers, Credit Union National Association (CUNA) President/CEO Bill Cheney, and CUNA Executive Vice President John Magill was referenced.
For the full story, entitled "White House visitor logs provide window into lobbying industry," use the resource link.
WASHINGTON (5/22/12)--Credit unions continue to make the most of the momentum created by last year's Bank Transfer Day, attracting around half a million new memberships in March, as reported earlier in News Now. These new memberships may be moving some credit unions closer to the $10 billion-assets threshold that triggers consumer protection enforcement and supervisory authority of the Consumer Financial Protection Bureau (CFPB).
Credit unions with less than $10 billion in assets are exempt from supervision and enforcement by the CFPB
Washington's Boeing Employees CU (BECU) could soon join the list of credit unions subject to CFPB examination. It exceeded $10 billion in assets for the quarter ended March 31. However, BECU would need to hold more than $10 billion in assets for four consecutive quarters to come under CFPB examination authority under CFPB rules set by teh Dodd-Frank Act.
North Carolina's State Employees CU, Navy FCU, and Pentagon FCU are the only credit unions that are currently subject to CFPB examination.
Marc Shafroth, Credit Union National Association (CUNA) director of data and statistics, said BECU's recent rate of growth means that credit union would likely come under CFPB examination authority in March 2013.
SchoolsFirst FCU, Santa Ana, Calif., could also join this list in the next few years, according to Shafroth. That credit union held $9.4 billion in assets as of March, and Shafroth said it may be another year before SchoolsFirst eclipses $10 billion in assets.
Alliant CU, Chicago, Ill., may also come close to the $10 billion-asset threshold in the coming years, as that credit union held $8.4 billion in assets as of March.
CUNA continues to press the CFPB to minimize the impact of CFPB rules on credit unions where possible and appropriate.
WASHINGTON (5/22/12)—Small business group Women Impacting Public Policy and the National Rural Electric Cooperative Association (NRECA) are two of the latest groups to join the fight to increase the credit union member business lending cap, and the Credit Union National Association (CUNA) has urged credit unions and their members to keep pressure on Congress as members of the U.S. House return to their home districts this week.
MBL increase legislation, which has been offered in both the House and Senate, has received support from several pro-business, conservative, libertarian and free-market organizations, as well as credit unions across the country. A vote on the Senate MBL legislation could come at any time, but is not expected to take place this week. (See related May 21 News Now story: CUs, small biz to keep up MBL efforts: CUNA)
Senators could, however, address some key credit union issues this week.
One such issue is the National Flood Insurance Program (NFIP), which is still scheduled to expire on May 31. Legislation that would extend the NFIP until the end of June was approved by the House last week, and could be voted on by the Senate this week. Senators are also expected to consider legislation that would extend the NFIP by five years, and, potentially, reform elements of the program, this week.
The hearing schedule this week is relatively light, with the Senate Banking Committee scheduled to hold an oversight hearing on potential changes to derivatives regulation today and a hearing on the Responsible Homeowner Refinancing Act (S. 3085) on Thursday.
The Senate will begin its Memorial Day district work period at the end of this week, and is not set to return to Washington until June 4. The House is scheduled to hold its next session on May 29.
WASHINGTON (5/22/12)--Concerned that another round of problems with the Internal Revenue Service's (IRS) "automatic revocation process" for federal credit unions' tax exemption is about to occur, the Credit Union National Association (CUNA) joined three other credit union groups in a bid to head off potential Form 990-T issues for credit unions.
In a letter from a law firm representing CUNA, the National Association of State Credit Union Supervisors (NASCUS), CUNA Mutual Group and the American Association of Credit Union Leagues (AACUL), the IRS was asked to confirm that steps are "being taken to prevent a significant re-occurrence of the automatic revocations for the federally-chartered credit unions filing the Form 990-T." The letter was sent by the law firm of Caplin and Drysdale, Washington, DC.
The issue arises from federal credit unions' claiming the health insurance premium tax credit. To do so, federal credit unions are required to file Form 990-T – even though, as federal credit unions, they are exempt from filing Form 990 itself.
The IRS requires Form 990 filers to disclose the names and compensation of certain key employees such as directors, their 20 highest compensated non-executive employees, any independent contractors that work for the firm, and former high ranking or key employees.
The filing of 990 forms apparently triggers a search by the IRS computer for past Form 990 filings. If none are found for the federal credit union, an exemption revocation letter is automatically sent to the credit union. "But federal credit unions are not required to file Form 990 and should not be receiving these letters," said CUNA General Counsel Eric Richard.
"It is vital that the tax agency address this issue as soon as possible, and keep such letters from going out," he added.
The IRS last year notified several state-chartered credit unions, and some federally chartered credit unions, that they would lose their tax-exempt status after their respective regulators failed to file Form 990 tax returns on their behalf.
May 15 marked the annual deadline for filing a new Form 990 for those organizations that are required to file it. "The concern is now that we will see a whole new round of erroneous revocation letters from the IRS to federal credit unions because of that filing deadline and the situation that federal credit unions find themselves in, at no fault of their own," Richard said.
- WASHINGTON (5/22/12)--New York City's Emigrant Bank is asking Congress to pass a bill that would push back the date by which banks needed to be under $15 billion in assets to avoid the new capital requirement. The bank received a $2.3 billion advance from the Federal Home Loan Bank of New York during the financial crisis because it was concerned that its uninsured high-balance depositors might flee. The loan temporarily pushed Emigrant's total assets over $15 billion--the threshold at which banks are subject to a provision of the Dodd-Frank Act that prevents them from counting trust preferred securities as part of their Tier 1 capital. The Dodd-Frank Act set the cut-off date for the threshold Dec. 31, 2009. The bill, which is sponsored by Rep. Michael Grimm (R-N.Y.) and co-sponsored by six of other House representatives from New York, would push that deadline back by three months. Emigrant Bank, which would be the only financial institution affected by the bill, currently has $10 billion in assets …