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Fox Business Features CUNA's Cheney On CU Tax-status Advocacy

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NEW YORK, N.Y. (7/3/13)--Credit Union National Association President/CEO Bill Cheney told a nationwide audience in a Tuesday appearance on Fox Business Network's Markets Now that "consumers deserve a choice, that's why it's so important to preserve the [credit union tax status]."

Click to view larger image CUNA President/CEO Bill Cheney discussed the Don't Tax My Credit Union! campaign in his Fox Business Network interview. (CUNA Photo)
A tax on credit unions would be, in effect, a tax on 96 million Americans, Cheney noted. "If you tax credit unions, you eliminate credit unions, and I don't think anyone wants to see credit unions go away." The only people suggesting that credit unions should be taxed are banks, who don't want the competition, he explained.

In the interview, Cheney discussed the ongoing tax reform efforts in the U.S. Congress, how legislators are taking on the task of tax reform, and why it is vital that the credit union tax status is preserved.

He also discussed the benefits that the credit union tax status provides to members and non-members alike. Credit unions are a better deal, and it's not just because of the tax exemption, he said. Credit union members and bank customers both benefit, as banks are forced to lower their rates in some cases, Cheney added.

Credit unions and their supporters are already fighting to ensure the credit union tax status remains unchanged, and more than 230,000 separate congressional contacts have been made since mid-May as part of a groundbreaking CUNA/state credit union league advocacy effort. Members are using CUNA/league 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.

'We started early and we're going to ramp up our efforts and get credit union members involved," Cheney said.

"Credit union members support their credit union because they own the credit union, they're a part of the credit union family and they want to take action to protect their credit union," the CUNA CEO said in closing. Cheney was in New York for CUNA's America's Credit Union Conference, which ends today.

For the full interview and more on credit union tax advocacy efforts, use the resource links.

CFPB Issues 2014 List Of Rural And Underserved Counties

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WASHINGTON (7/3/12)--The Consumer Financial Protection Bureau has posted an updated list of counties determined to be "rural" or "underserved," for purposes of applying several regulatory provisions throughout the year. The first list covered 2013 and the updated list applies to 2014.

In a blog posting the bureau noted that several of its rules have provisions related to mortgage loans made by creditors which, during the preceding year, operated predominantly in 'rural' or 'underserved' counties or to mortgage loans made in 'rural' counties."

The CFPB said the following rules have provisions that relate to mortgage loans made by creditors operating predominantly in rural or underserved counties or made in rural counties:
  • CFPB escrow requirements under the Truth in Lending Act rule, which took effect on June 1, requires certain creditors to create escrow accounts for a minimum of five years for higher-priced mortgage loans (HPMLs). However, such loans made by certain small creditors that operate predominantly in rural or underserved counties are exempt from this requirement.
  • Under the January 2013 Ability-to-Repay and Qualified Mortgage (QM) standards under the Truth in Lending Act rule, effective Jan. 10, 2014, mortgage loans with balloon payments do not meet the QM standard in most cases. However, certain small creditors that operate predominantly in rural or underserved counties will be eligible to originate balloon-payment QMs.
The CFPB further noted that as part of the May 2013 Ability-to-Repay and QM standards, the bureau recently expanded this exemption to allow certain small creditors during the period from Jan.  10, 2014, to Jan. 10, 2016, to make balloon-payment qualified mortgages even if they do not operate predominantly in rural or underserved areas.

For more, use the resource link to read the CFPB blog post on the 2014 definitions.

COPPA July 1 Effective Date Prompts FTC Guidance

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WASHINGTON (7/3/13)--Changes to the Federal Trade Commission's (FTC) Children's Online Privacy Protection Act (COPPA) rule took effect on July 1, and the FTC has followed up on that deadline by releasing two new sets of guidance.

The COPPA rules address the collection, use, and/or disclosure of personal information for children under 13 years old by websites and other online services, including credit unions that have websites and/or mobile banking applications.

The recent changes aim to strengthen children's privacy protections and give parents greater control over the personal information that websites and online services may collect from their young children.

The new guidance will help small businesses that operate child-directed websites, mobile applications and plug-ins ensure they are compliant with the rule changes.
The new resources include:
  • A six-step COPPA compliance document, "The Children's Online Privacy Protection Rule: A Six-Step Compliance Plan for Your Business," that aims to help companies determine if they are covered by COPPA, and what steps they are required to take to protect children's privacy; and
  • "Protecting Children's Privacy Under COPPA," a video that details the rule changes and explains business obligations under the rule.
The FTC in spring also released a series of frequently asked questions (FAQs) that addresses the basics of the COPPA rule, as well as more specific concerns.

For more on the COPPA resources, use the links.

Fed Approves Final Basel III Rules

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WASHINGTON (7/3/13)--Rules to implement Basel III regulatory capital reforms in the United States were approved by the Federal Reserve Tuesday.

The Fed said in a release the final rule "minimizes burden on smaller, less complex financial institutions."

The international bank rules, which will require banks to hold more capital as a buffer against future financial shocks, do not apply to credit unions in the United States. In general, the Basel III standards are intended to apply to "internationally active" banks, but some jurisdictions choose to apply Basel III to a wider range of banking institutions and/or credit unions. Australia, several Canadian provinces, and some Latin American countries apply Basel-based standards to credit unions.

The Fed intends the capital reforms to "help ensure banks maintain strong capital positions that will enable them to continue lending to creditworthy households and businesses even after unforeseen losses and during severe economic downturns."

Basel III standards for banks in the United States will require common equity of 4.5%.  Banks also must  hold a 2.5% conservation buffer, which will be gradually introduced, and to increase their Tier 1 levels from 4% to 6%. The rule includes a minimum leverage ratio of 4% for all banking organizations.

The phase-in period for smaller, less complex banking organizations will not begin until Jan. 2015 while the phase-in period for larger institutions begins in Jan. 2014, the Fed said.

For more on Basel III, use the resource link.

NEW: NCUA Loan Participation Rule Now Effective Sept. 23

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ALEXANDRIA, Va. (7/3/13, UPDATED: 1:05 P.M. ET)--There is now a new, later effective day for the National Credit Union Administration's final rule on loan participations:  Sept. 23. The Credit Union National Association strongly urged the agency to address the effective date to give credit unions flexibility to adequately prepare for the rule's changes. The original effective date was July 25.

"NCUA's effective date change and the numerous key changes in the final rule are important indications that the board is responding to reasonable concerns without sacrificing safety and soundness, which is a commendable approach to regulation," CUNA Deputy General Counsel Mary Dunn noted when the effective date change was announced today.

The NCUA approved the loan participation rule at last month's open board meeting. The final features many improvements suggested by CUNA even though CUNA did not support any new loan participation rule at this time.

The rule sets a limit on loans from one originator of 100% of a credit union's net worth; and provides an expanded waiver process for the single-originator limit and limits to one borrower.

The NCUA also approved a provision so that credit unions pushed over the limit by new rule can move their loans into line: such credit unions would not have to sell loans immediately to come into compliance but can bring their participation activity into line in the ordinary course of business or seek a waiver.

For more on the loan participations rule, use the resource link.