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Senate Banking To Vote On Metsger NCUA Nomination July 16

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WASHINGTON (7/12/13)--The nomination of Richard Metsger to become a member of the National Credit Union Administration board is scheduled to be voted on July 16 by the Senate Banking Committee. The panel will meet in executive session at 10 a.m. (ET).
The former Oregon State Sen. Rick Metsger (D) was named as a candidate by the president in June and a hearing on his nomination was conducted June 27.  At that hearing Metsger said, "updating, simplifying, eliminating and clarifying existing rules to ensure that they are effective, but not excessive, consistent with safety and soundness," will be a focus if he is confirmed to serve the agency.
If the Senate Banking Committee approves his nomination and it is next confirmed by the U.S. Senate, Metsger will fill the seat vacated late last year after the term of board member Gigi Hyland expired.
Metsger served as Oregon state senator from 1999 to 2011, where he chaired the Oregon Senate committee that heard all financial institution legislation. He was a member of the board of directors at Portland Teachers CU from 1993 to 2001 and has also been a board member of Financial Beginnings, a nonprofit focused on increasing students' financial literacy.
"If confirmed, I will add a fresh set of eyes to policies old and new to reflect that diversity [of experience]," Metsger pledged during the nomination hearing.
Also on Senate Banking's July 16 is consideration of the nominations of Rep. Melvin L. Watt (D-N.C.) to be director of the Federal Housing Finance Agency; Dr. Jason Furman, of New York, to be a member and chairman of the Council of Economic Advisers; Kara M. Stein of Maryland, to be a member of the Securities and Exchange Commission; and Dr. Michael S. Piwowar of Virginia, to be a member of the Securities and Exchange Commission.

NEW: Cheney Urges CUs To Keep Up 'Don't Tax My CU' Efforts

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WASHINGTON (7/15/13)--Calendar pages are turning quickly toward the July 26 deadline set by U.S. Congress tax policy leaders who want all suggestions for tax reform legislation by that date. The Credit Union National Association's latest "Inside Exchange" video, featuring President/CEO Bill Cheney, underscores the importance of credit unions and their members contacting federal lawmakers directly--and now--to say, "Don't tax my credit union."

"Even though credit unions are delivering the message--in ever-increasing numbers--they must "keep up the contacts" to ensure the credit union tax exemption remains intact, Cheney emphasizes.

CUNA created the "Inside Exchange" video series as a new way to directly communicate to member credit unions, and to provide detailed insights into what's happening in Washington, D.C., in the legislative, regulatory and political arenas. For more on this new video, and previous videos featuring CUNA comments on credit union advocacy efforts, use the resource link.

The "Inside Exchange" videos can also be found by clicking on the "stay informed" section of the gray menu bar at the top of the homepage and scrolling down to the "Inside Exchange" pane.

Cheney Writes Key Administration Officials On CU Tax Status

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WASHINGTON (7/12/13)--The Credit Union National Association is making the case for maintaining the credit union tax status with lawmakers and administration officials alike, and these efforts continued on Thursday as CUNA President/CEO Bill Cheney wrote to U.S. Treasury Secretary Jack Lew and National Economic Council Director Gene Sperling.

Cheney urged both agency heads to support the continuation of the credit union tax status, and asked them to meet with CUNA on the tax issue at their convenience. The tax treatment of credit unions continues to serve the purpose for which it was created--promoting financial choices for consumers and small businesses, he emphasized.

"Annual tax revenues on credit unions would be barely enough to fund the federal government for one hour," Cheney noted in separate letters to both policymakers.

The Joint Committee on Taxation estimated that the credit union tax "expenditure" is $0.5 billion in 2012 and 2013, and an average annual cost of $0.8 billion between 2013 and 2017. However, Cheney added, the benefits credit unions provide to their members and others totaled $8 billion in 2012. And, he said, consumers are catching on to the benefits of joining a credit union: More than two million Americans joined credit unions in 2012.

"Because the substantial benefits of the exemption to the public far exceed its costs, credit unions' tax status continues to reflect good public policy," Cheney said.

"A tax on credit unions would reflect very poor public policy," he added. The loss of the tax exemption would seriously restrict the ability of credit unions to offer financial service options to consumers and small businesses and could result in a significant, rapid reduction in the number of credit unions that can continue to serve their communities, Cheney explained.

CUNA and the leagues are also involving members in direct tax status advocacy efforts. More than 300,000 separate congressional contacts have been made since mid-May as part of a groundbreaking CUNA/state credit union league advocacy effort. Credit unions and their members are using CUNA and the state credit union leagues' resources, social media sites including Facebook, and micro-video site Vine, to tell their legislators, "Don't Tax My Credit Union!" This pro-credit union message is also being shared through Twitter feeds, CUNA's Twitter handle @CUNAadvocacy and the hashtag, #DontTaxMyCU.

For more on CUNA advocacy efforts, use the resource links.

Duke Will Leave Fed Aug. 31

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WASHINGTON (7/12/13)--Elizabeth Duke, a member of the Federal Reserve Board since Aug. 5, 2008, submitted her resignation yesterday, effective Aug. 31.

In her resignation letter, Duke noted that her five years on the board witnessed "some of the most challenging conditions ever encountered by the Federal Reserve" including the "massive overhaul" of financial system regulation required by the Dodd-Frank Wall Street Reform Act and "informed by lessons learned during the financial crisis."

Fed Chairman Ben Bernanke said of Duke's service: ""Betsy has made invaluable contributions to the Federal Reserve and to the country during her five years at the board. She brought fresh ideas grounded in her deep knowledge of the banking industry and the real-world dynamic between borrowers and lenders. I wish her the best in her future endeavors."

Before joining the Fed, Duke was senior executive vice president and chief operating officer of TowneBank, a Virginia-based community bank. Prior to that, she served as an executive vice president at Wachovia Bank and as an executive vice president at SouthTrust Bank. Duke has also served as president/CEO of Bank of Tidewater, based in Virginia Beach, Va.

Use the resource link to read her resignation letter.

GSE Reform Bill Unveiled In House

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WASHINGTON (7/12/13)--The chairman of the House Financial Services Committee, Rep. Jeb Hensarling (R-Texas), and others of the committee's leadership unveiled a bill Thursday they say is intended to "create a sustainable housing finance system."
Credit Union National Association President/CEO Bill Cheney said the new bill "gives credit unions hope for their future in the housing finance market."
The Protecting American Taxpayers and Homeowners--or PATH--Act would:
  • Phase out government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac within five years;
  • Increase competition by ending the federal government's domination of the housing finance market; and
  • Give consumers more choices in determining which mortgage product best suits their needs.
"This is a positive approach toward establishing a sustainable housing market, and ensuring credit unions have access to a functioning, well-regulated secondary market," Cheney said. " Legislation that will transform today's system must ensure credit unions can continue to provide mortgage liquidity to their members.
"House Financial Services Committee Chairman Jeb Hensarling clearly understands the importance of credit unions in the housing finance sector, and we appreciate that the legislation takes into consideration many of our concerns. We look forward to working with Chairman Hensarling and others to achieve a secondary market that allows credit unions to continue meeting the mortgage finance needs of their members."
Hensarling also announced Thursday that the Financial Services Committee will meet on Thursday, July 18 to hold a hearing on the PATH Act.

On the Senate side last month, several senators co-sponsored bipartisan legislation that would wind down Fannie Mae and Freddie Mac and replace them with a new mortgage guarantor, the Federal Mortgage Insurance Corporation (FMIC). 

It was introduced by Sens. Bob Corker (R-Tenn.), Mark Warner (D-Va.), Mike Johanns (R-Neb.), Jon Tester (D-Mont.), Dean Heller (R-Nev.), Heidi Heitkamp (D-N.D.), Jerry Moran (R-Kan.) and Kay Hagan (D-N.C.).

July 31 Is NCUA Secondary Capital Webinar For LICUs

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ALEXANDRIA, Va. (7/12/13)--The basics of the National Credit Union Administration's secondary capital requirements, and practical tips on how eligible low-income designated credit unions (LICUs) can best use their secondary capital authority, will be discussed in an upcoming agency webinar.

The agency on Thursday also announced it has moved its scheduled July closed board meeting forward by one day, to July 24, and released a released a video highlighting the information offered on two NCUA consumer websites, and Pocket Cents. Use the resource links for more on these items.

The free NCUA webinar, entitled "Will Secondary Capital Work for You?," is scheduled to take place on Wednesday, July 31 at 2 p.m. ET. NCUA Office of Small Credit Union Initiatives (OSCUI) staff and NCUA Region III Division of Supervision officials will present the webinar.

A credit union manager will also detail how his credit union utilizes secondary capital to supplement its net worth and to better serve its low-income field of membership.

The NCUA said webinar participants may submit questions in advance by sending an e-mail to The subject line of the e-mail should read, "Secondary Capital Webinar."

To register for the NCUA webinar, use the resource link.
The LICU designation brings benefits that include the ability to offer and accept secondary capital accounts. The secondary capital must take the form of subordinated debt--a borrowing transaction that must be repaid over time, if the funds are not used to cover operating losses, according to the NCUA.

Eligible LICUs are subject to borrowing limitations and capitalization requirements, and their secondary capital plans must be approved by the NCUA.

CUs, Leagues Meet With CFPB Director After Maine Hearing

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WASHINGTON (7/12/13)--Following a debt-collection field hearing in Portland, Maine, on July 10, Consumer Financial Protection Bureau Director Richard Cordray held a separate meeting with credit union members and top-level representatives of the Maine, New Hampshire and Vermont credit union leagues on key credit union topics, including regulatory burden.

Click to view larger image Pictured, from left to right, are Association of Vermont Credit Unions President/CEO Joseph Bergeron, CFPB Director Richard Cordray, Maine Credit Union League President John Murphy and Dan Egan, president of the Massachusetts Credit Union League, New Hampshire Credit Union League, and the Credit Union Association of Rhode Island. (Photo provided by the Maine Credit Union League)
Overdraft protection plans, student loans, and mortgage rule concerns, including exemption levels and foreclosure issues, were among the top items covered during the conversation, according to Dan Egan, president of the Massachusetts Credit Union League, New Hampshire Credit Union League, and the Credit Union Association of Rhode Island.

Maine Credit Union League President/CEO John G. Murphy also emphasized the regulatory burden that credit unions face today during the meeting.

"The burden is significant, and we would like to see the agency use its authority to exempt credit unions from a number of requirements. Credit unions didn't cause the financial crises and broader exemptions would limit the burden on credit unions without undermining consumer protection," Murphy told News Now.

Credit unions are also concerned about what the agency may impose on credit unions for ongoing data collection requirements, and what plan B is for the bureau if it is determined the agency acted without due authority when it issued rules under the Dodd-Frank Act, Murphy added.

Michael L'Ecuyer, CEO of Bellweather Community CU, Manchester, N.H., and a member of the Credit Union National Association's Board of Directors, also asked the CFPB to take into consideration the implementation of its provisions. "It is important for the CFPB to have adequate training and clear procedures to assist examiners in conducting examinations and in providing a public road map for implementation. The meeting confirmed that the CFPB is sensitive to the volume and timing of new mortgage rules and the impact on compliance," he said.

Also participating was Association of Vermont Credit Unions President/CEO Joseph Bergeron.

CUNA Deputy General Counsel Mary Dunn noted this week that CUNA, the state leagues and credit unions have worked diligently to pursue a number of improvements in CFPB rules, which the agency has acted upon.

Such improvements include:
  • Limited liability for credit unions under the remittances rule;
  • Allowing certain loans to be considered as qualified mortgages even if they don't meet all of the QM requirements;
  • Delaying the effective date of the prohibition on financing of single premium insurance;
  • Loss mitigation processing improvements for small servicers; and
  • Avoiding licensing requirements under the mortgage loan originator rule.
Dunn added that CUNA continues to emphasize to the CFPB growing concerns about the regulatory burdens faced by credit unions and that credit unions should be exempt from a number of CFPB requirements.

The CFPB's debt-collection event featured remarks from Cordray, as well as testimony from consumer groups, industry representatives, and members of the public.

For more on the CFPB event, use the resource link.