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Washington Archive

Washington

Don't Tax My CU Advocacy Contacts Top 80,000

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WASHINGTON (6/13/13)--Credit unions and their members continue to make their voices heard, making more than 80,000 congressional contacts to tell their legislators "Don't Tax My Credit Union!"--raising the number of contacts by 50,000 in just the last week.

The Credit Union National Association and state credit union leagues have developed a groundbreaking large-scale, nationwide grassroots-mobilization campaign to encourage the more than 96 million credit union members nationwide to present a unified message to members of congress: Don't Tax My Credit Union!

About 1,500 credit unions have heeded the advocacy call and have acted to help generate members' contacts to Capitol Hill.

"The word is out, and credit union members are engaging, and spreading the word about the benefits they get because of the credit union tax status. They are spreading the message through tweets, retweets, and other online posts,"  CUNA Senior Vice President of Political Affairs Richard Gose said Wednesday.

"Credit unions and the leagues are getting the message out and educating members on the importance of the credit union tax status," he added.

CUNA's advocacy web site, DontTaxMyCreditUnion.org, has welcomed 94,264 unique visitors since it went live in mid-May. Overall, the site has garnered 109,164 visits and 216,099 page views in that same time frame.

CUNA's grassroots "Don't Tax My Credit Union!" campaign takes a forward leap by combining traditional online email campaign methods with newer media vehicles such as Facebook, a Twitter handle @CUNAadvocacy, and hashtag, #DontTaxMyCU, and social media micro-video site Vine.

CUNA has also developed a reformatted version of its tax advocacy toolkit to help credit unions and their members spread this message.

For more CUNA/league advocacy resources, use the resource links.

NEW: Senate Finance Committee's 'Tax Options' Paper Notes CUs

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WASHINGTON (6/13/13, UPDATED 1:45 p.m. ET)--The release today of the Senate Finance Committee's "tax options" paper on exempt organizations--with the elimination of the credit union tax status written clearly in black and white as a reform option--should be a wake-up call for action by credit unions, Credit Union National Association President/CEO Bill Cheney said in immediate response to the paper's release.

The options paper today is the sixth to be released by the committee in recent months.  It follows papers on simplifying the tax system for families and businesses, business investment and innovation, infrastructure, international competitiveness, and economic development.

"As CUNA has been saying for some time, our tax exemption, and its preservation for the long-term, is actively in the mix of discussion on Capitol Hill, as this 'options paper' clearly shows. That's why we launched our 'Don't Tax My Credit Union campaign," Cheney said.

He emphasized that credit unions are different from all other groups mentioned in the most recent paper. "We are cooperatives, operating on a not-for-profit basis, and actively returning billions of dollars in benefits each year to our members--benefits that far exceed any new revenue that would come from taxing credit unions.

"We can make the distinction that credit unions are different and preserve our tax status - if we speak up, now. Credit unions should contact their senators and congressmen without delay with the simple message, 'Don't Tax My Credit Union!'," he urged.

The groundbreaking grassroots advocacy campaign to support the credit union tax status combines CUNA's traditional efforts of such things as email-writing drives, with new social media and online outreach efforts.

Also of note in the tax policy discussions, it was widely reported yesterday that key Republicans in the House, speaking at the 24th Annual Tax, Budget and Health Care Policy Seminar sponsored by law firm BakerHostetler, the Federal Policy Group, and the Yale Club of Washington, vowed to take this "once in a generation" opportunity to execute tax policy reforms.

For more CUNA/league advocacy resources, use the resource links. (Also, see related story in this issue of News Now: Don't Tax My CU Advocacy Contacts Top 80,000.)

Resource Links

NCUA Clarifies Electric Co-op FOM Considerations

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ALEXANDRIA, Va. (6/13/13)--The National Credit Union Administration would use a standard seven-item test, as set forth in the agency's Chartering and Field of Membership Manual, to determine if an electric cooperative qualifies to be included in a federal credit union's field of membership, NCUA General Counsel Mike McKenna said in a legal opinion letter.

The letter responded to a request for clarification, which asked if an electrical cooperative shared sufficient associational common bond to be included in a given credit union's field of membership.

"No one factor alone is determinative of membership eligibility as an association," including whether the cooperative requires its members to purchase electricity from it, McKenna wrote.

"In the end, the particular details of a cooperative's structure and other factors surrounding its operation will determine if its relationship with its members is primarily or incidentally a customer-client relationship and if it satisfies the totality of the circumstances test," McKenna said.

The seven factors that the NCUA must consider as part of the circumstances test are:

  • Whether members pay dues;
  • Whether members participate in the furtherance of the goals of the association;
  • Whether the members have voting rights. To meet this requirement, members need not vote directly for an officer, but may vote for a delegate who in turn represents the members' interests;
  • Whether the association maintains a membership list;
  • Whether the association sponsors other activities;
  • The association's membership eligibility requirements; and
  • The frequency of meetings.
NCUA considers all of these factors together, McKenna wrote.

For the full NCUA legal opinion letter, use the resource link.

Latest On Escrow, ARM Notices, Flood Insurance Highlighted In CompBlog

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WASHINGTON (6/12/13)--Answers to key escrow account, force-placed insurance and adjustable rate mortgage (ARM) questions are all featured in recent posts on the Credit Union National Association's regulatory and compliance resource, CUNA CompBlog.

The escrow blog post takes on ten popular credit union questions regarding the Consumer Financial Protection Bureau's new rule, including: 

  • Does the new escrow rule apply to mortgage loans a credit union already has on the books;
  • Are credit unions that meet all four of the criteria to be exempt from the new 5-year mandatory escrow account requirement still required to follow the 1-year escrow account requirement; and
  • Are credit unions required to establish an escrow account for a higher-priced loan secured by a trailer, if the member is living in said trailer.
Can a credit union force-place hazard insurance on a past-due mortgage account if the associated escrow account does not have enough funds to cover the hazard insurance premium? This question is also answered in CompBlog.

CUNA in the blog also clarifies another question regarding the CFPB's Regulation Z mortgage servicing final rule. Credit unions and others, CUNA explains, will not need to send ARM notices to their members and customers before the final rule is effective.

For more of these question and answer pieces and other CompBlog compliance gems, use the resource link.

CDFI Fund Intros New Bond, Capacity Building Programs

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WASHINGTON (6/13/13)--The Community Development Financial Institutions (CDFI) Fund this week announced a pair of new initiatives: The first-ever round of the CDFI Bond Guarantee Program and a capacity-building training series to support CDFIs that are Minority Depository Institutions (MDIs).

Applications for the CDFI Bond Guarantee Program are now being accepted for the first time. The program, which was finalized this year, will back notes or bonds of up to 30-years duration issued by CDFIs with full guarantees from the U.S. Treasury Department, the fund's parent entity. The bond program will support CDFI lending and investment by providing a source of long-term, patient capital to CDFIs, according to the CDFI Fund.

A total of $500 million will be made available to CDFIs through this program.

The secretary of the Treasury may guarantee up to five bonds this year, and each bond will be for a minimum of $100 million. Multiple eligible CDFIs may pool together in a single $100 million-minimum bond issuance provided that each eligible CDFI participates at a minimum of $10 million, the CDFI Fund said in a release.

CDFIs may use bond funds for:
  • Supporting commercial facilities that promote revitalization, community stability, and job creation/retention;
  • The provision of basic financial services;
  • Affordable housing initiatives;
  • Job creation programs for low-income individuals; and
  • Community or economic development in low-income and underserved rural areas.
Community development and financial empowerment will also be addressed by the CDFI Fund's MDI capacity building series. The series will address the "unique challenges facing CDFI MDIs, and will build their capacity to provide community development and financial services to their target markets," through a series of customized training sessions and workshops, the CDFI Fund said.

Scheduled topics in this training and technical assistance program include:
  • Building leadership capacity;
  • Expanding capitalization;
  • Managing organizational transformation;
  • Enhancing operational performance; and
  • The impact of compliance on community financial institutions.
For more, use the link to the CDFI Fund website.

Reverse Mortgage Bill Passes House

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WASHINGTON (6/13/13)--The Reverse Mortgage Stabilization Act (H.R. 2167), which would allow the Secretary of Housing and Urban Development (HUD) to alter the Federal Housing Administration's (FHA) "reverse mortgage" insurance program, passed the U.S. House by voice vote on Wednesday.

The bill is intended to help HUD make quicker changes to its Home Equity Conversion Mortgage (HECM) program. Home Equity Conversion Mortgages (HECMs) are federally insured reverse mortgages backed by the U.S. Department of Housing and Urban Development.

Currently, HUD changes to this program require a lengthy 18-month regulatory process before they can become final.  The bill was introduced by Reps. Mike Fitzpatrick (R-Pa.) and Denny Heck (D-Wash.), members of the House Financial Services Committee.

H.R. 2167 would allow the HUD secretary to make administrative and policy changes to the Home Equity Conversion Mortgage Program through a mortgagee letter "when immediate changes are necessary to improve the fiscal safety and soundness of the program," according to a House Financial Services Committee release announcing the  vote.

The bill requires Senate approval before it can be signed into law.

For more on the bill, use the resource link.