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Washington

On Tax Advocacy: 'Later May Be Too Late,' D.C. Insider Says

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WASHINGTON (7/2/13)--It would be a great mistake for any group with an interest in tax issues "to simply shrug their shoulders, turn their back," and say tax reform is not going to happen in the immediate future, Washington lobbyist and QGA Public Affairs Chairman/Co-founder Jack Quinn told Politico this week.

"Later may be too late...You really want to begin shaping public opinion now," Quinn added in the Politico piece, refuting those who have questioned whether the U.S. Congress will stick to a tight tax reform schedule.

Quinn's comments reinforce Credit Union National Association President/CEO Bill Cheney's recent request that credit union advocates ramp up their volume to protect the credit union tax status.

The leaders of the Senate Finance Committee, Sens. Max Baucus (D-Mont.) and Orrin Hatch (R-Utah), last week asked their Senate colleagues to be ready to tackle a tax reform vote early this fall. The committee plans to take a "blank slate" approach to its bill, which would remove all tax expenditures from the code and would add back in those that make the grade. All proposed language for a bill must be submitted for the committee's consideration by July 26.

In the face of these reform conversations, credit union and member tax advocacy efforts have remained strong. More than 230,000 separate congressional contacts have been made since mid-May, as citizens reach out to tell their legislators, "Don't Tax My Credit Union!"

The groundbreaking CUNA/state credit union league advocacy effort, Don't Tax My Credit Union, combines elements of traditional letter writing campaigns with new media methods to leverage the power of credit unions' 96 million members.

The outreach effort also continues to gain traction on social media: More than 300,000 credit union supporters have used the Don't Tax My Credit Union! Facebook page and their own Twitter feeds to share pro-credit union messages. CUNA's Twitter handle @CUNAadvocacy, and hashtag, #DontTaxMyCU, and social media micro-video site Vine have also seen heavy traffic.

CUNA also has 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.

Best Reward CU Assumes PEF FCU Members, Assets

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ALEXANDRIA, Va. (7/2/13)--PEF FCU, which was taken under conservatorship by the National Credit Union Administration late last month, has been liquidated.

Best Reward CU, Brook Park, Ohio, has assumed certain members, shares assets and liabilities from PEF. Best Reward CU holds $100 million in assets and has 12,700 members. The new Best Reward CU members will experience no interruption in services, NCUA said. Their accounts remain insured up to $250,000 by the National Credit Union Share Insurance Fund.

PEF, which had 2,974 members and held $31.3 million in assets, was placed under conservatorship to protect the credit union's financial stability and operations, NCUA said. However, the agency said Monday it later determined PEF FCU had no prospect for restoring viable operations.

The Highland Heights, Ohio, credit union was originally chartered in 1957 as Picker X-ray CU, and served those who live, work, worship or attend school in the eastern section of Cuyahoga County, Ohio.

PEF is the 11th credit union to be liquidated this year. ASI FCU of Harahan, La., assumed the members, deposits and loans of New Orleans, La.-based Ochsner Clinic FCU late last week. (See July 1 News Now story: ASI FCU Assumes Ochsner Clinic FCU Shares.)

For the full NCUA release, use the resource link.

Student Lending Issues Featured In Regulatory Advocacy Report

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WASHINGTON (7/2/13)--The federal student loan rate, which was set at 3.4%, doubled for future loans to 6.8% on Monday. While the U.S. Congress did not take action to avert this increase, it can still address the problem when members return from the July 4 recess next week.

Student lending issues are on the minds of many, and details of a private Senate Banking Committee hearing on private student loans held last week are included in this week's edition of the Credit Union National Association's Regulatory Advocacy Report.

During that hearing, lawmakers told banking regulators they are concerned about access to student loans and mounting debt problems facing college students. A major point of contention was banks' ability to provide workouts for distressed borrowers and whether banks can offer flexible repayment options. The regulators indicated that banks were free to offer borrowers flexible repayment options.

However, the Regulatory Advocacy Report noted, accounting standards and a lack of regulator guidance prevent many credit unions and banks from offering robust repayment options.

The Federal Deposit Insurance Corp. has indicated that it will be releasing private student loan guidance soon. CUNA is hopeful that the National Credit Union Administration will also address issues of repayment modifications in the near future.

Other items addressed in this week's Regulatory Advocacy Report include:
  • NCUA board nominee Richard Metsger's nomination hearing testimony;
  • CUNA comments on third-party clarifications;
  • CUNA's participation in a Bank Secrecy Act Advisory Group meeting; and
  • An NCUA Inspector General communique to Congress.
Employees or volunteers of CUNA- and state credit union league-member credit unions can sign up below to receive the Regulatory Advocacy Report.

The Regulatory Advocacy Report is archived on cuna.org.

Citi To Pay $968M To Settle Fannie Mae Mortgage Issues

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WASHINGTON (7/2/13)--Citigroup has agreed to pay Fannie Mae $968 million to resolve mortgage origination issues, the bank announced on Monday.

In a press release, Citigroup said the payment relates to potential future repurchase claims for breaches of representations and warranties on 3.7 million residential first mortgage loans sold to the government-sponsored enterprise.

The agreement covers loans originated between 2000 and 2012 that were later sold to Fannie Mae.

Citi's agreement with Fannie Mae covers potential future origination-related representation and warranty claims on the covered loans.

Citi noted the agreement does not release its liability with respect to its servicing or other ongoing contractual obligations on the covered loans. Loans sold with a performance guaranty or under special credit enhancement programs are also not covered under the agreement, Citigroup added.

Citi has and will continue to work with Fannie Mae on the timely repurchase of any mortgage loans sold to Fannie Mae that do not meet Fannie Mae's requirements.

Fannie Mae Executive Vice President and General Counsel Bradley Lerman said the agreement "resolves legacy repurchase issues, compensates taxpayers for losses" and allows the two firms to move forward and strengthen their business relationship.

Fannie Mae said similar resolutions with other financial firms could be reached.