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Introduction Of Miller's CU Relief Bill Is Imminent

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WASHINGTON (6/17/13)--House Financial Services Committee Vice Chairman Gary Miller (R-Calif.) will soon unveil anticipated legislation that will open formal discussions in the U.S. House about possible regulatory relief measures for credit unions and community banks. The bill could be introduced as early as today.

Miller's bill will focus on credit unions and topics discussed within its section range from such things as enhancements to National Credit Union Administration authority in a few areas to improved capital standards for credit unions, to a cost-benefit analysis of rules, past and present.

"Credit unions wholeheartedly thank Rep. Miller for acting on their great need for regulatory relief so fewer resources are diverted from their true business of serving their members," said Sam Whitfield, Credit Union National Association vice president of legislative affairs. He added CUNA's appreciation that Miller included CUNA in the development of his legislation.

Miller's bill will join other CUNA-supported regulatory relief legislative initiatives already introduced in the House of Representatives, including:

  • The Credit Union Small Business Jobs Creation Act (H.R. 688),  which would permit business lending credit unions to apply to NCUA for the authority to lend up to 27.5% of their assets to small business members;
  • The Capital Access for Small Business and Jobs Act (H.R. 719), which would permit credit unions to accept supplemental forms of capital;
  • The Financial Institutions Examination Fairness and Reform Act (H.R. 1553), which would bring fairness to the examination and examination appeals processes;
  • The Community Lending Enhancement And Relief Act (H.R. 1750), which would exempt credit unions from several of the Dodd-Frank mandated mortgage rules, including new escrow rules; and,
  • The Capital Access for Small Community Financial Institutions (H.R. 1862), which would permit privately insured credit unions to join a federal home loan bank.
 Miller's credit union bill will likely be joined by other regulatory relief legislative initiatives coming out of the financial services panel this year.

Other Financial Services Committee members are said to be preparing to offer bipartisan regulatory relief bills and are working to find for areas where credit union and community bank interests may intersect in a bill. CUNA has assured lawmakers that such areas exist; for instance, one such area is examination fairness legislation.

During a hearing in April, CUNA delivered a 35-point plan for credit union regulatory relief to federal lawmakers. Among changes promoted by CUNA are:

  • Increasing National Credit Union Administration budget transparency;
  • Adjusting the treatment of non-owner occupied one- to four-family dwelling loans for credit unions from business loans to residential real estate loans;
  • Increasing the maturity limit for higher education loans made by federal credit unions; and,
  • Expanding investment authority in credit union service organizations.

NCUA Sets July 18 Online Town Hall

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ALEXANDRIA, Va. (6/17/13)--The National Credit Union Administration's regulatory modernization efforts, credit union industry performance and emerging credit union system risks will be among the topics discussed when agency Chairman Debbie Matz hosts a free town hall webinar on July 18.

"Effective regulation requires an ongoing, two-way dialogue and the sharing of important information…There will be a lot to discuss, and I'm looking forward to a lively, interesting dialogue," Matz said.

The webinar is scheduled to begin at 3 p.m. (ET). Other webinar topics include:

  • NCUA's proposed rule on derivatives;
  • Low-income credit unions;
  • Emergency liquidity and the Central Liquidity Facility; and
  • Guidance on credit ratings and risk management.
Webinar questions can be sent in advance to WebinarQuestions@ncua.gov. The subject line of the email should read, "NCUA Town Hall."

To register for the webinar, use the resource link.

Cheney Highlights Strong CU System Leaders, Current And Future

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WASHINGTON (6/17/13)--Credit Union National Association President/CEO Bill Cheney last week thanked two retiring league presidents--Dan Plauda of the Illinois Credit Union League and Sylvia Lyon of the Credit Union Association of New Mexico--for their "tremendous contributions not only to the credit union systems in their respective states, but to the credit union system as a whole." While acknowledging that the credit union system "may be turning a page," with these and similar announcements from long-time league leaders in Massachusetts/New Hampshire/Rhode Island, Pennsylvania, South Carolina, and Tennessee--it also heralds a new, exciting chapter to come, Cheney added.

Plauda will be retiring on June 30, 2014 after 37 years of service to the credit union movement, the ICUL announced last week. (See June 11 News Now story: Plauda To Exit Illinois League June 2014.)

Lyon's pending retirement was also announced last week. CUANM Board Chairman and Rio Grande CU President/CEO Chris Fitzgerald in a statement thanked the 20-year credit union veteran for her efforts, which led to great successes in the areas of governance, strategic positioning, political advocacy and philanthropic commitment.

"New league leaders have been making their mark, spearheading innovations in league advocacy and service. The American Association of Credit Union Leagues is closely studying the evolution to anticipate its own members' needs and stay ahead of the curve," Cheney said in this week's edition of The Cheney Report.

This week's Cheney Report also includes:

  • Updates on tax and housing finance reform efforts;
  • Positive press coverage for aSmarterChoice.org; and
  • News on the Consumer Financial Protection Bureau's overdraft work.

Each Friday, The Cheney Report provides a valuable window into CUNA's actions on behalf of member credit unions and reinforces the value of CUNA membership.

To sign up for The Cheney Report, click the resource link below and use the "subscribe" tab on the right of the page.

Past issues of The Cheney Report are also archived on cuna.org.

Valley Pride FCU Signs LUA With NCUA

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ALEXANDRIA, Va. (6/17/13)--Valley Pride FCU, Plains, Pa., has agreed to "take steps to correct unsafe and unsound practices" under the terms of a letter of understanding and agreement (LUA) with the National Credit Union Administration (NCUA).

In the letter, the credit union agrees to:

  • Engage a qualified individual to reconcile bank and corporate accounts;
  • Engage a Certified Public Accountant to perform an opinion audit;
  • Obtain training for the board of directors; and
  • Implement internal control procedures through the Supervisory Committee.
The NCUA said it is working with the credit union to correct these issues. Violations of the LUA could result in civil financial penalties, cease and desist orders, removal and prohibition orders, or orders to liquidate, conserve or merge the credit union, the NCUA said.

The credit union will remain open and will serve its members while corrective actions are taken.

For the full NCUA release, use the resource link.

CUNA: Small Biz Week Is Time To Spotlight CUs' SBA Issues

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WASHINGTON (6/17/13)--Today kicks off National Small Business Week, a time proclaimed by the president each year for the last 50 to mark the importance of small businesses to the nation's economy. It is an ideal time, says Credit Union National Association Deputy General Counsel Mary Dunn, to highlight all that the country's credit unions do to support small businesses in their communities--and how much more they could do with improved policies.

"This is a good week to note that credit unions' member business lending (MBL) portfolios grew while banks' small business lending portfolios shrank during the past two decades and especially since the financial crisis that began in 2007-as documented by the U.S. Small Business Administration's (SBA) 2011 independent report 'The Increasing Importance of Credit Unions in Small Business Lending,'" Dunn notes.

"And, credit unions are willing to do even more if the U.S. Congress will pass bi-partisan legislation to increase the MBL cap to 27.5% of a well-capitalized credit unions assets--up from the current 12.25% cap," she says. CUNA estimates that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

Dunn adds that this week is also a good time to mention CUNA's ongoing review of SBA policies that have the unintended consequence of hindering credit union involvement in the agency's flagship 7(a) and 504 guaranteed lending programs.

"The cost and complexity of the application process to these good programs has been a stumbling block for some credit unions interested in this avenue for providing more credit to their small business members.

"CUNA continues to look for regulatory changes that would benefit credit unions and small businesses by making more credit available," Dunn notes.

Bloomberg Notes CUs' Strong Support For Small Biz Hurt By Cap

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WASHINGTON (6/17/13)--A Bloomberg Business Week article cites the strong support credit unions provided small businesses during the Great Recession, and credited them with picking up the slack created as banks clamped down on credit to small business owners. But the article notes the statutory member business lending (MBL) cap is constraining credit unions' ability to keep lending.

The article warned that a new Biz2Credit Small Business Lending Index shows some decline in that activity by credit unions. The 12.25%-of-assets member business lending cap is one of the top reasons for this funding squeeze, Bloomberg noted. Bloomberg reported that credit unions are working hard to convince the U.S. Congress to ease the lending restrictions.

Also, Credit Union National Association Chief Economist Bill Hampel explained in the article that the Biz2Credit statistics are different than figures from the National Credit Union Administration, whose data for the first quarter of 2013 shows that credit unions made $3.9 billion in business loans early this year, an increase from the $3.1 billion total reported in the first quarter of 2012.

"A lot of small business lending is relationship-based and requires local knowledge," Hampel told Bloomberg. Biz2Credit's surveying method may not create an accurate representation of credit union loan application volume, he added.

CUNA continues to call on Congress to help credit unions and the economy at large by approving MBL cap increase legislation. U.S. House (H.R. 688) and Senate (S. 968) bills would increase the credit union MBL cap from 12.25% of assets to 27.5%. CUNA has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers and without increasing the size of government.

S. 968, which was introduced by Sen. Mark Udall (D-Colo.) in mid-May, currently has 15 co-sponsors. H.R. 688, introduced by Reps. Ed Royce (R-Calif.) and co-sponsor Carolyn McCarthy (D-N.Y.), has 102 co-sponsors.

More than 500 credit unions are at or quickly approaching the cap, accounting for approximately 60% of credit union business lending, CUNA President/CEO Bill Cheney noted in a letter to Congress early this month. "If the cap is not increased, the ability of these credit unions to continue to be there for their small business-owning members will be jeopardized," he added.

Hearings On Dodd-Frank Impact On Housing, CFPB Spending, Round Out June Schedule

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WASHINGTON (6/17/13)--The House Financial Services Committee last week announced the hearing schedule for the remainder of this month, including a June 18 session at which Credit Union National Association witness Jerry Reed, chief lending officer of Alaska USA FCU, Anchorage, will represent credit unions.

The June 18 hearing, entitled "Examining How the Dodd-Frank Act Hampers Home Ownership," is scheduled to begin at 10 a.m. ET.

Also on the schedule are:

  • A June 18 oversight and investigations subcommittee hearing on Consumer Financial Protection Bureau spending;
 

  • A June 19 full committee markup of four bills that would reduce federal regulatory burdens for investors and job creators. The four bills are: The Small Business Capital Access and Job Preservation Act (H.R. 1105), the Burdensome Data Collection Relief Act (H.R. 1135), the Audit Integrity and Job Protection Act (H.R. 1564) and H.R. 2374, which would amend Section 913 of the Dodd-Frank Act;
 

  • A June 26 full committee hearing on "Too Big to Fail" institutions. Current and former Federal Reserve Bank presidents are scheduled to appear at that hearing; and
 

  • A June 26 housing and insurance subcommittee hearing on the U.S. Department of Housing and Urban Development's Moving-to-Work program.