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Sen. Finance Chair Backs CU Tax Status In MCUN Remarks

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WASHINGTON (5/8/13)--"Credit unions' tax exempt status is not going away, not on my watch," Senate Finance Committee Chairman Max Baucus (D-Mont.) said in a recent message to Montana credit unions.

"Over the years, folks in D.C. have tried to cut your tax exempt status, and I've gone to the mat to fight back," he added.

"I was thrilled to hear Sen. Baucus clearly reiterate his support for our unique tax treatment. He understands the value that credit unions provide to their members far exceeds the amount of tax that might be generated," Montana Credit Union Network President/CEO Tracie Kenyon said.

As chair of the Senate's powerful tax-policy committee and leader of the Joint Committee on Taxation, Baucus is one of the most influential legislators currently working on a tax code revamp.

Credit Union National Association President/CEO Bill Cheney also expressed gratitude to Baucus for his statements and his ongoing support of credit unions.   However, due to "general uncertainty on Capitol Hill," Cheney urged credit unions not to take anything for granted.

"Credit unions must be vigilant to protect their tax status. One of the best ways to do that is to ensure that our members and supporters, nationwide, understand the value that credit unions bring to their memberships and consumers at large and how the tax exemption plays a critical role for not-for-profit credit unions," he said. Cheney encouraged credit unions to use CUNA's Tax Advocacy Toolkit for information and tools to help their advocacy and educational efforts.

As part of the tax code revamp efforts, the joint committee received a 550-plus page report on tax policy reform on Monday. (Use the resource link for the May 7 News Now story: Ways and Means Releases Working Group Tax Reform Report.)

The report, which was developed by 11 separate working groups, mentions the credit union tax exemption, as expected. However, the report does not indicate that the working groups received any comments urging the repeal of the credit union tax exemption.

The House Ways and Means Committee is expected to meet privately on Wednesday to discuss the tax reform report, and discussions are scheduled to continue next week. Later this summer, the committee is expected to consider legislation to completely overhaul the corporate and individual tax codes, with full House consideration prior to the August recess.

Baucus's Senate Finance Committee has been meeting privately each week to discuss a series of options papers developed by committee staff, and a tax policy report similar to the one provided to the Joint Committee on Taxation could be released later this spring.

CUNA has met with many members of the House and Senate committees to advocate the retention of the credit union tax status.

Baucus, who said he is proud to be among the one-in-three of Montanans that are credit union members, made his pro-credit union remarks in a brief video that played at the MCUN's 76th annual meeting and convention held April 17-19 in Great Falls.

Montana's credit unions are critical to job growth and "provide a rock solid foundation for our business and our families to prosper," Baucus added.

Dodd Frank, JOBS Act Amendments Moved On To House

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WASHINGTON (5/8/13)--The House Financial Services Committee took another step toward reforming aspects of the Dodd-Frank Wall Street Reform Act, amending the Jumpstart Our Business Startups (JOBS) Act and addressing some derivatives issues, marking up nine measures and moving them along to the U.S. House in a lengthy Tuesday session.

Committee Chair Rep. Jeb Hensarling (R-Texas) acknowledged that the changes "in some respects are modest," but said they were not insignificant in that they reduce "the sheer weight, volume, complexity, and uncertainty of federal rules and regulations,"

Hensarling said in a release that two of the bills amend the JOBS Act, six would amend Title VII of the Dodd-Frank Act, and one would enhance the economic analysis performed by the Securities and Exchange Commission in carrying out its regulatory responsibilities. The Dodd-Frank Act changes would address unintended consequences of the derivatives provisions of those regulations.

The nine committee-approved bills are:

  • A bill to amend a provision of the Securities Act of 1933 directing the Securities and Exchange Commission to add a particular class of securities to those exempted under such Act to provide a deadline for such action (H.R. 701);
  • The Holding Company Registration Threshold Equalization Act of 2013 (H.R. 801);
  • The Swap Data Repository and Clearinghouse Indemnification Correction Act of 2013 (H.R. 742);
  • The Financial Competitive Act of 2013 (H.R. 1341);
  • The Business Risk Mitigation and Price Stabilization Act of 2013 (H.R. 634);
  • The Inter-Affiliate Swap Clarification Act (H.R. 677);
  • The Swaps Regulatory Improvement Act (H.R. 992);
  • The Swap Jurisdiction Certainty Act (H.R. 1256); and
  • The SEC Regulatory Accountability Act (H.R. 1062).
The next stop for the bills is the House floor.

FTC Declines To Extend COPPA Changes' Effective Date

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WASHINGTON (5/8/13)--The Federal Trade Commission (FTC) has rejected requests by the U.S. Chamber of Commerce and others to delay changes to the Children's Online Privacy Protection Act (COPPA) and announced Tuesday the effective date is July 1, as originally scheduled.

The FTC said of its decision that the enhanced privacy protections now included in COPPA must be made available to children without delay, "especially in the face of rapid evolution in the ways children interact with the Internet."

The COPPA rules address the collection, use, and/or disclosure of personal information for children under 13 years old by websites and other online services, including credit unions that have websites and/or mobile banking applications. The recent changes aim to strengthen children's privacy protections and give parents greater control over the personal information that websites and online services may collect from their young children.

Also related to COPPA, the FTC late last month released a series of frequently asked questions (FAQs) that addresses the basics of the COPPA rule, as well as more specific concerns.

For more on the FTC FAQ, use the resource link.

NEW: CFPB Proposes CUNA-sought Credit Rule Delay

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WASHINGTON (5/8/13, UPDATED 11:11 a.m.)--The Consumer Financial Protection Bureau has favorably responded to the Credit Union National Association's recent request that the agency delay a June 1 effective date relating to the prohibition on financing certain credit insurance charges. The provision is contained within the bureau's mortgage loan originator compensation rule.

The CFPB told CUNA it will seek comment for 15 days on a proposed delay.

CUNA had expressed concern that certain language within the new rule needed clarification, and that a June 1 effective date of this prohibition could upend practices at some credit unions. However, CUNA does not support the financing of actual single premium insurance charges.

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, CUNA 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.

CFPB Cracks Down On Two Debt Relief Companies

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WASHINGTON (5/8/13)--Under a complaint filed Tuesday by the Consumer Financial Protection Bureau, two debt-relief providers, Mission Settlement Agency and Premier Consultant Group LLC, would be made to halt their current practices, repay impacted customers and give up allegedly ill-gotten gains.

"These wolves in sheep's clothing take money from consumers who are already struggling to pay their bills, falsely promising them help while really making their problems worse," CFPB Director Richard Cordray said.

The compliant, which was filed by the CFPB in the U.S. District Court for the Southern District of New York, alleges that the two firms and related entities and individuals:

  • Unlawfully collected fees in advance of providing debt relief services; and
  • Failed to provide effective debt relief services.
Cordray also said Mission "impersonated a government agency" and encouraged employees "to sign up consumers by any means, including lies about the cost and timing of fees."

The defendants allegedly charged more than $1.3 million in combined fees to more than 1000 consumers in multiple states.

The CFPB worked with the U.S. Department of Justice to investigate both firms. "Consumers deserve better, and we are proud of this joint effort to crack down on unscrupulous behavior," Cordray added.

For more on the charges, use the resource link.