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In Texas CU-friendly candidate gets CU league support

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WASHINGTON (8/1/12)--"Whether their candidate wins or loses an election, credit unions win politically when they become actively involved--like Texas credit unions just did--trying to get credit union-friendly candidates elected," Richard Gose, Credit Union National Association (CUNA) Senior Vice President of Political Affairs said Tuesday night.

He congratulated Texas credit unions and the Texas Credit Union League (TCUL) for its energetic Get-Out-the-Vote effort in advance of the Texas Republican Senate runoff contest between Lieutenant Governor David Dewhurst and former State Solicitor General Ted Cruz, and the effort didn't let up until yesterday's vote.

Dewhurst was endorsed by the TCUL, and the TCUL and credit unions distributed pro-Dewhurst postcards to registered Republican voters across the state in recent weeks. More than 52,000 credit union member households received multiple mailers from the league in what was credit unions' first partisan communication for a Senate candidate.

Late Tuesday night, AP called the race in favor of Cruz.

Gose said of the results, "The results do nothing to detract from the importance of the Texas effort. You can only win when you try."

Dewhurst supported key credit union issues, including increasing the member business lending cap, during his campaign, and the TCUL's Winter Prosapio said Dewhurst, overall, understands the credit union difference.

"He has been there for credit unions as lieutenant governor, and has a track record of being with the League on many critical credit union issues," she added.

Dewhurst in a TCUL video noted that credit unions have continued lending and working with their members in a difficult economy.

CUNA Vice President of Political Affairs Trey Hawkins commended the league and Texas credit unions for their efforts. CUNA's Credit Union Legislative Action Council--known as CULAC—also supported Dewhurst in his initial primary contest and this recent runoff.

Dewhurst and Cruz were pitted against each other in a runoff election after Dewhurst in May failed to win the 50% of votes needed to secure the Republican Senate nomination. Dewhurst received 45% of the primary vote, while Cruz tallied 34% of all votes cast in the primary.

The results of the runoff are expected to be official today. The winner will run against a Democratic challenger for the Senate seat of the retiring Sen. Kay Bailey Hutchison (R) this fall.

Texas has not had a Democratic senator in office since 1993.

Texas State Rep. Marc Veasey (D) also received support from CULAC in his in the Democratic nomination bid. Veasey faced former State Rep. Domingo Garcia (D) in a runoff election in the newly created 33rd district of Texas. Veasy, defeated his Democratic runoff opponent 53% - 47%. He is favored in the Democratic seat for November.

Hawkins said CULAC "will continue to be in the game on behalf of credit union-friendly candidates, and will aggressively support credit union friends in this year's elections."

The presidency, congressional seats, and state and local positions are all at stake in 2012.

CUs lose champion with LaTourette retirement

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WASHINGTON (8/1/12)--Credit unions are losing a champion with Rep. Steve LaTourette's (R-Ohio) decision to retire from the House of Representatives once his current term expires, said Credit Union National Association (CUNA) Executive Vice President John Magill. LaTourette announced late Monday that he would not seek re-election  after nine terms in the House.

"Steve will long be remembered by credit unions for the bold role he took, as a second-term congressman, when he sponsored the 1998 Credit Union Membership Access Act (H.R. 1151), which preserved the right of consumers to join credit unions.

"His leadership was one of the keys to victory in that battle," Magill said.

LaTourette cited the lack of congressional compromise as one reason behind his decision to retire.

The congressman joined fellow credit union champion, former Rep. Paul Kanjorski (D-Pa.), as a lead sponsor of H.R. 1151.

More recently, LaTourette supported legislation that would have delayed the effective date of debit interchange fee cap regulations. Also over his tenure, he has supported the Credit Union Regulatory Improvements Act, credit union share insurance increase legislation and CUNA-backed data security legislation.

The legislator will officially notify state Republican officials of his decision to retire on Aug. 8, several news outlets reported. The timing will allow state authorities to appoint a candidate for this fall's election, avoiding a special primary.

The eventual Republican candidate will face Democrat Dale Blanchard this November. The winner of that election will represent Ohio's 14th congressional district, which is in the northeast corner of the state.

FinCEN warned of due diligence regs burdens

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WASHINGTON (8/1/12)--Credit unions would face significant challenges and costs if expanded customer due diligence (CDD) regulations that were proposed by the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) are finalized, noted Credit Union National Association Regulatory Counsel Dennis Tsang following a Tuesday public hearing.

CUNA joined financial services groups, regulators and members of the law enforcement community at the hearing, which focused on a CDD advanced notice of proposed rulemaking (ANPR) issued this spring.

A key part of the FinCEN customer/member due diligence plan--issued in February--addresses standards for verifying the identity of each member/customer and understanding the "nature and purpose" of each account that is held at an institution to assess the likelihood of suspicious activity.

The new regulations, if created, would be one part of a broader U.S. Treasury strategy to enhance financial transparency in order to strengthen efforts to combat financial crime, including money laundering, terrorist financing, and tax evasion, FinCEN has said.

CUNA remains concerned regarding parts of the FinCEN ANPR that would expand "beneficial ownership" requirements. Credit unions would be required to obtain additional documentation and agreements related to all applicable members if these requirements were expanded.

CUNA has noted that reviewing accounts to determine if they meet "beneficial ownership" standards can be time consuming for credit unions, and the requirements can conflict or interfere with member confidentiality standards and can create fiduciary or legal issues

The information needed to review these accounts can also be difficult to obtain, and credit unions may need to increase their staff and make costly software changes to comply with the requirements, CUNA added.

Many hearing attendees shared CUNA's "beneficial ownership" concerns, and said the potential broad scope of the FinCEN CDD rules could create issues for financial services providers.

CUNA in a comment letter filed earlier this year suggested that FinCEN abandon the due diligence ANPR and, instead, work with the National Credit Union Administration and other federal financial regulators to further clarify current Bank Secrecy Act and anti-money laundering rules.

FinCEN has said it will schedule additional public hearings on the CDD proposal, but those hearings have not been set yet.

CFPB recounts six months of action

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WASHINGTON (8/1/12)--Consumer complaints, and how those complaints have been resolved, were addressed in the Consumer Financial Protection Bureau's (CFPB) latest semiannual report to the U.S. Congress.

The agency said it received 55,300 consumer complaints between July 21, 2011 and June 30, 2012. Mortgage issues prompted 43% of those complaints, and 34% of the complaints received were tied to credit card accounts.

More than half of the mortgage complaints related to loan modifications, foreclosures or collections. The CFPB said a large number of consumers expressed confusion about whether making timely trial period payments would help them receive permanent mortgage modifications.

One-quarter of the complaints related to loan servicing. Loan application issues were also common, the CFPB reported.

Fourteen percent of the 18,800 credit card complaints reported to the agency involved billing issues, and 10% were tied to interest rate issues. Identity theft incidents, credit reporting issues, late fees and collection disputes were also reported to the CFPB.

Account management was a chief concern in 41% of the 8,100 bank account complaints filed, and many consumers also said the terms of some overdraft protection plans were confusing.

Around 80% of the complaints received by the CFPB were forwarded on to the institution named in the complaint, and just over one-in-four of these complaints resulted in financial relief for the consumer. Three percent of the complaints were closed without monetary relief. More than half of the complaints were closed with an explanation to the consumer, and 13% of the complaints are still under review.

The agency also detailed the steps it has taken to improve financial institution oversight, and enhance consumer protections, over the past year.

CFPB Director Richard Cordray was scheduled to discuss the report before the Senate Banking Committee on Tuesday, but that hearing was removed from the schedule.

For the full CFPB report, use the resource link.

Final NCUA listening session Exams reg burden redux

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DENVER, Colo. (8/1/12)--As they have been in earlier meetings held across the country, regulatory burdens and examination issues were central themes at the National Credit Union Administration's (NCUA) July 31 listening session in Denver, Colo.

NCUA Chairman Debbie Matz was joined at the Denver session by NCUA staff, including Executive Director Dave Marquis, Director of Examination and Insurance Larry Fazio, NCUA examiners and regional representatives.

Around 80 credit union and corporate credit union employees attended the listening session, which was the sixth and final listening session planned this summer. The sessions were held, in part, to create an open dialogue between the agency and those it regulates.

Attendees again suggested how the NCUA could improve its examination process, and the importance of communication between examiners and credit union staff was emphasized by NCUA staff and credit union representatives.

The NCUA's recently released liquidity proposal, and the future of the agency's Central Liquidity Facility, were also discussed during the session.

Previous listening sessions included discussions of the increasing trend of small credit union mergers, Low Income Credit Union designations, overdraft fees, interchange, member business lending and related waivers, loan participations, and the agency's recent decision to eliminate its regulatory flexibility rule and extend similar management and investment rights to all credit unions.

The Credit Union National Association and its examination and supervision subcommittee will follow up with the NCUA on key issues brought up during these listening sessions.