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CU, Bank Reg Relief Bill Could Come Soon

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WASHINGTON (6/4/13)--Comprehensive regulatory relief legislation could be considered by the House Financial Services Committee in the coming weeks. The Credit Union National Association is urging legislators to include greater supplemental capital and member business lending authority to this package, Ryan Donovan, CUNA senior vice president of legislative affairs, said Monday.

Financial Services Committee members are said to be preparing to offer a bipartisan regulatory relief bill, or bills, Donovan noted. This could be the subject of consideration in the committee later this month, if leaders are able to agree on the components of the bill, he said.

Committee members are looking 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.

Pamela Stephens, CEO of Security One FCU, Arlington, Texas, presented CUNA's 35-point relief plan for regulatory relief during a March subcommittee hearing. Changes promoted by the CUNA plan include:
  • 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.
Committee Vice Chairman Rep. Gary Miller (R-Calif.) announced his intention to introduce a credit union relief bill at that same hearing.

This week, the U.S. House is expected to focus on fiscal year 2014 appropriations bills, including defense and national security spending. The Senate is scheduled to resume consideration of the 2013 Farm Bill (S. 954).

Credit unions will also be interested in several hearings this week, including:

  • A Tuesday Senate Banking Committee hearing on Iran sanctions;
  • A Wednesday House Financial Services capital markets and government sponsored enterprises subcommittee hearing entitled "Examining the Market Power and Impact of Proxy Advisory Firms.";
  • A Wednesday House Small Business Committee hearing on reducing duplication and promoting efficiency at the U.S. Small Business Administration;
  • A Senate Banking housing, transportation, and community development subcommittee hearing on reverse mortgage sustainability; and
  • A Senate Banking Committee economic policy subcommittee hearing entitled "The State of the American Dream: Economic Policy and the Future of the Middle Class."
Innovative ideas for raising capital will be the topic of a Thursday House Small Business investigations, oversight and regulations subcommittee hearing.

Federal Regulators Back Small FI Accommodations In FASB Rule

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WASHINGTON (6/4/13)--The Federal Financial Institutions Examination Council (FFIEC), which is comprised of federal bank regulators plus the National Credit Union Administration, sent a letter to the Financial Accounting Standards Board that supported proposed credit impairment recognition changes but encouraged modifications to the proposal for "small and less complex entities."

The joint agency letter was issued the same day as the separate Friday letter from the NCUA that urged FASB to strongly consider how proposed credit impairment recognition changes could impact small- and medium-sized credit unions, and their ability to serve members of modest means. The letter said the compliance costs that the proposal could create are a particular concern for the agency and that the NCUA also has safety and soundness concerns regarding the proposal.

The Credit Union National Association has also voiced concern on behalf of credit unions and strongly opposes the FASB rule, saying it not only would be detrimental to the credit union system, but also could have serious, unintended consequences for borrowers and the economy.

CUNA urged FASB to drop the proposal or, if that's not feasible, to work with the credit union system to develop credit loss reporting standards for credit unions, separate from those for publicly traded companies, that will reflect the unique business model of credit unions while ensuring credit loss issues are reported appropriately. 

The FFIEC letter supports FASB's controversial effort to move from an incurred loss model to an expected loss model for measuring impairment as a way to respond to "one of the lessons learned from the financial crisis."  The letter said the FASB changes would address the "too-little, too-late" criticism of loan loss allowances sparked by the crisis by replacing the "probable incurred loss threshold" with a practice of measuring losses expected at the balance sheet date.

However, the FFIEC agencies back applying the proposed principles to "all reporting entities," but in a manner that is "appropriate and practical for their circumstances."

The letter said, "...(S)maller entities and those with less complex financial asset portfolios may be able to achieve the objectives of the (current expected credit loss) model through estimation practices that are less burdensome and costly than those that may be used by larger and more complex entities.

To accommodate the resource constraints faced by smaller institutions, the proposed standard could be modified to include additional practical expedients that satisfy the intended measurement objective, a transition period that considers the time and effort necessary to implement the new model, and condensed disclosure requirements."

Tax Policy Developments As Congress Returns

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WASHINGTON (6/4/13)--The Credit Union National Association continued to talk tax reform with Capitol Hill staff members during last week's recess, and CUNA remains focused on the U.S. Congress's ongoing efforts at tax reform as legislators return to Washington this week.

Leaders on the House Ways and Means Committee are also continuing their own tax reform work, he said.
As these discussions move along, CUNA continues 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!
More than 30,000 congressional contacts have been sparked since CUNA and the leagues kicked off the large-scale, nationwide grassroots-mobilization campaign in mid-May.
CUNA has created a new web site, , a new Facebook page , a Twitter handle @CUNAadvocacy , and hashtag, #DontTaxMyCU, and a reformatted version of CUNA's tax advocacy tool kit to help credit unions and their members spread this message.
Spending bills, defense authorization, potential immigration reforms, student lending action and Internal Revenue Service issues are among the items on the near-term agenda for the U.S. Congress, but key tax writers have indicated that these other issues will not distract them from their tax reform task, CUNA Senior Vice President of Legislative Affairs Ryan Donovan noted.
For more CUNA/league advocacy resources, use the links.

Sen. Lautenberg Of N.J. Dies At 89

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WASHINGTON (6/4/13)--Sen. Frank Lautenberg (D-N.J.) has died at age 89.
Lautenberg, a World War II veteran, first served in the Senate for 19 years from 1982 to 2001. He retired briefly but was re-elected when he decided to run again in 2003.
Earlier this year, Lautenberg, who was the Senate's oldest member, announced plans to retire in January 2015.
New Jersey Governor Chris Christie (R ) will appoint Lautenberg's immediate successor. Christie on Monday praised the senator for leading "a life well lived."

FHFA To Study Fannie, Freddie Foreclosure Sales

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WASHINGTON (6/4/13)--The Inspector General for the Federal Housing Finance Agency (FHFA) has announced it will investigate how Fannie Mae and Freddie Mac are managing the sales of foreclosed properties. 

The review will scrutinize how the homes involved are repaired, maintained and marketed for sale, reports this week's Credit Union National Association Regulatory Advocacy Report.

The CUNA RAR notes that the government-sponsored housing enterprises owned approximately 192,000 foreclosed properties at the end of 2012, and nearly one million troubled mortgages that could reach foreclosure.

The FHFA IG has released a joint report with the U.S. Department of Housing and Urban Development Department IG entitled, "Joint Report on Federally Owned or Overseen Real Estate Owned Properties." Use the resource link to access the report.

Also in this week's RAR, free to CUNA members by subscription, are articles on the Consumer Financial Protection Bureau's delay of a credit insurance premium financing prohibition, and a Financial Accounting Standards Board request for comment on a private company decision-making framework, among many other topics.

Employees or volunteers of CUNA- and state credit union league-member credit unions can use the second link below to sign up for the Regulatory Advocacy Report.

The RAR is archived on

NACHA Seeks Comment On ACH Third-Party Clarifications

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WASHINGTON (6/4/13)--NACHA--The Electronic Payments Association is seeking comment on its plan to more clearly define who is considered a third party within the Automated Clearing House (ACH) Network.

The proposed amendment to NACHA rules would clarify the definitions, roles, and responsibilities of third-party service providers and/ or third-party senders on ACH transactions.  The proposed clarifications are intended to strengthen compliance with NACHA operating rules among ACH participants.

Comments will be accepted by NACHA through June 28.  The Credit Union National Association will be reviewing the proposal with the CUNA Payments Policy Subcommittee.