WASHINGTON (7/31/13, UPDATED 4:30 p.m. ET )--The ranking Democrat on the powerful congressional panel in charge of tax policy oversight, the House Ways and Means Committee, issued a public statement saying he is "committed" to a tax code that "ensures important policies, like the credit union tax exemption, continue to serve the best interest of the American taxpayer."
Rep. Sander Levin, from Michigan, said, "I have long supported credit unions and the critical role they play in our communities.
"Throughout the financial crisis, credit unions increased lending because of their cooperative membership structure--providing a needed lifeline to individuals and small businesses that other lenders and financial institutions could not.
"I am committed to a thoughtful reform of our nation's tax code that ensures important policies, like the credit union tax exemption, continue to serve the best interest of the American taxpayer."
Rep. Gary Peters (D), also of Michigan, also weighed in today to support the credit union tax exemption.
"I completely support the tax exempt status of credit unions," said Peters. "Credit unions are member-owned. It's about helping our middle class families who are part of credit unions all across the state. The savings that are realized are passed directly to millions of members in Michigan.
Credit unions help people access financial services in a cost-effective way every day. Because of this, I will continue to support credit unions and their tax status."
Michigan Credit Union League & Affiliates CEO David Adams thanked Levin and Peters for adding their voices to the important public support of the credit union tax status and for their continued support of credit unions and the federal tax exemption.
Regarding Levin, Adams added, "As the immediate past chairman of the House Ways and Means Committee and now as ranking Democrat on the committee, Mr. Levin's strong position will carry significant weight with his colleagues, both Democrats and Republicans. Rep. Levin knows that credit unions make a difference in the lives of millions of middle-class Americans and small businesses."
"As the immediate past chairman of the House Ways and Means Committee and now as ranking Democrat on the committee, Mr. Levin's strong position will carry significant weight with his colleagues, both Democrats and Republicans."
Levin's and Peters'endorsements of credit unions and their tax status join a growing body of lawmakers' recent public support--four of which come from Adams' state of Michigan.
In addition to Levin and Peters, House Intelligence Committee Chairman Mike Rogers (R-Mich.), a senior House Republican, today publicly endorsed the continued tax-exempt status of credit unions in any tax reform plan and added that credit unions play a critical role in the nation's economy.
Sen. Mark Begich (D-Alaska) and Rep. Dan Kildee (D-Mich.) have also spoken out in support of the credit union tax exemption.
In May, a 550-plus page report on tax policy reform created by 11 Ways and Means working groups was delivered to the Joint Committee on Taxation. And July 26 was the deadline for senators to submit their tax reform proposals to that chamber's Finance Committee leaders.
WASHINGTON (7/31/13)--In a second comment letter on the National Credit Union Administration's derivatives proposal, the Credit Union National Association noted that the agency's plan, if left unchanged, would impose excessive requirements and high costs on participating credit unions, resulting in "a lost opportunity for credit unions to reduce risk in a similar manner allowed for banks.
"This would place credit unions and the credit union system at a distinct disadvantage. Moreover, it would deprive credit unions of an important tool to manage [interest rate risk (IRR)] and thereby contain costs for the National Credit Union Share Insurance Fund," CUNA Deputy General Counsel Mary Dunn wrote.
The NCUA derivatives proposal, released at the May open board meeting, would allow well-run federal credit unions to use simple derivatives to hedge against interest rate risks. The NCUA plan would allow only well-managed credit unions with $250 million or more in assets, and which have appropriate expertise, to apply for an agency derivatives investment program. Swaps and caps will be the only approved investments, and fees will be charged to cover costs related to application processing and supervision of the program.
"The costs to credit unions for complying with the provisions in the proposed derivatives rule are excessive and will place derivatives authority out of reach for many, if not most, credit unions seeking derivatives authority," Dunn emphasized in the comment letter.
CUNA adamantly opposed this approach. "If derivatives reduce IRR, then NCUA should be encouraging credit unions to make appropriate use of permissible derivative options instead of retiring barriers to their use, such as fees to apply or for supervision," Dunn said.
In a separate comment letter sent earlier this month, CUNA wrote that the NCUA's proposed a la carte fee structure "sets a precedent that, if applied to other products and services, could stifle innovation for credit unions by imposing additional burdens and costs that are simply not justified. CUNA called on the agency to develop the expertise necessary to enable it to properly regulate the evolving business model of a credit union without imposing extra charges. (See July 25 News Now story: CUNA Seeks Key Changes In NCUA Derivatives Proposal.)
For the full CUNA letter, use the resource link.
WASHINGTON (UPDATED: 7/31/13, 12:34 p.m. ET)--The U.S. District Court for the District of Columbia issued a decision today striking down the Federal Reserve's price caps on debit interchange fees. U.S. District Court Judge Richard Leon said in his ruling that the Fed did not follow congressional intent when it implemented the cap and other changes imposed by what is known as the Durbin amendment.
Credit Union National Association General Counsel Eric Richard said, "This decision will have a potentially devastating impact on the ability of small debit card issuers, particularly credit unions, to continue offering this vital payments service to their members and customers.
"The decision, no doubt, will challenge credit unions to continue their debit card programs without incurring drastic cuts in revenue, or imposing additional fees on their members--the last thing that credit unions want to do.
"Right now, the current debit interchange system remains the same. However, the court has signaled it is going to consider the current system further in the weeks to come. We are investigating our legal options on behalf of credit unions going forward."
CUNA and a broad coalition of trade groups filed an amicus brief in the case in April 2012 refuting the merchants' suit charges that the Fed cap is too high. The brief countered that it is, instead, too low and does not allow debit card issuers to cover their costs and a reasonable rate of return on their investments.
The joint brief described how small and large financial institutions are harmed by the Fed's tight fee ceiling. It underscored that consumers have not seen any pricing benefits for products and services promised by the merchants when they were fighting for a government-set cap on what card issuers may charge for their services.
The Fed was charged with setting the debit fee limit under provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Fed's final rule, which became effective in October 2011, caps debit interchange fees for issuers with assets of $10 billion or more at 21 cents.
However, Leon's ruling Wednesday said that Congress spoke clearly and decisively and the Fed's interpretation was not reasonable. His ruling vacates the Fed's interchange transaction fee and network non-exclusivity regulations and remands the rules back to the Fed.
WASHINGTON (7/31/13)--Rep. Dan Kildee (D-Mich.) has spoken out in support of the credit union tax exemption, noting the critical role credit unions play in Michigan's economy in a statement to the Michigan Credit Union League.
"Credit unions offer unique benefits and services to their members," Kildee said, "from the everyday worker who opens a savings account with a favorable interest rate, a family with a low-interest home mortgage loan to buy their first home, or an entrepreneur with access to a small business loan, credit unions have historically been structured in a way that directly benefits their members in my district and across the nation."
The House Financial Services Committee member said he has heard from many constituents who, like him and his family, "are members of credit unions and strongly support the services they provide to our local community and economy."
Credit Union National Association President/CEO Bill Cheney on Tuesday thanked Kildee for his support, and encouraged all members of Congress "to similarly weigh in, to let their own constituents know they hear--and understand--the growing volume of the message 'Don't Tax My Credit Union.'"
MCUL & Affiliates CEO David Adams today thanked Kildee for his strong statement of support for credit unions. "His statement gives a strong and credible endorsement for the credit union tax exemption being good public policy. We're hopeful that other members of the Michigan delegation will also affirm their support in a similar way," Adams said.
Kildee's support also reaffirms the importance of grassroots outreach, Adams added. Kildee's tax status statement follows Sen. Mark Begich's (D-Alaska) announcement that he too supports the credit union tax exemption.
Begich in a July 26 letter to the chairman and ranking member of the Senate Finance Committee said the tax exempt status of credit unions should be retained in any tax reform effort. (See News Now story: CUNA: Sen. Begich Letter Shows CU Tax Status Commitment.)
WASHINGTON (7/31/13)--National cybersecurity efforts require the active participation of the government, business and every consumer, and the Cybersecurity Act of 2013 (S. 1353) "takes a significant step towards encouraging the participation of all, while providing the tools to defend against cyber threats," the Credit Union National Association said in a joint trades letter sent to the U.S. Congress this week.
The letter thanked Senate Committee on Commerce, Science and Transportation Chairman Jay Rockefeller (D-W. Va.) and Ranking Member John Thune (R-S.D.) for their leadership in forging the bipartisan S. 1353. That bill passed out of the committee on a voice vote Tuesday afternoon.
The bill, which was introduced on July 24, would improve cybersecurity by:
Encouraging the private and public sectors to collaborate on standards, guidelines and best practices;
Increasing research and development for the design and testing of software;
Upgrading education for the work force and students so that they will be better prepared to stimulate and support innovation in cybersecurity, and
Promoting a national cybersecurity awareness campaign.
The letter was co-signed by the American Bankers Association, The Clearing House, Consumer Bankers Association, Electronic Funds Transfer Association, Financial Services - Information Sharing and Analysis Center, the Financial Services Roundtable, Independent Community Bankers Association, NACHA-The Electronic Payments Association, the National Association of Federal Credit Unions and the Securities Industry and Financial Markets Association.
WASHINGTON (7/31/13)--The Credit Union National Association Tuesday joined a number of trade organizations to support Rep. Scott Garrett (R-N.J.) for introducing an amendment that would fix a potentially troublesome change to the Fair Housing Act, and to urge U.S. House members to support the amendment.
Garrett's amendment could be added to H.R. 2610, the Transportation-HUD Appropriations Act for Fiscal Year 2014.
The U.S. Department of Housing and Urban Development (HUD) has proposed a regulation that would create liability for housing policies or practices that have a "disparate impact" on a protected class, even when there is no intent to discriminate. "Under this rule, even when a mortgage lender, apartment owner, apartment manager or housing cooperative takes every step to prevent discrimination and treats all consumers fairly and equally, a neutral policy can serve as a basis for very serious and harmful claims in the absence of intentional discrimination. This would make it harder for families to buy or rent a home," the CUNA letter stated.
CUNA and co-signers noted that their member companies "use facially neutral standards, such as loan-to-value ratios and debt-to-income ratios in mortgage underwriting and for resident screening purposes because they are neutral and nondiscriminatory."
Under the proposed HUD rule, lenders, apartment owners, apartment managers or housing cooperatives could be challenged if these practices yield different results for a protected class, and also face severe reputational harm and significant costs of defense.
"This would force them to allocate lending or leases to all groups equally, regardless of the demonstrable differences in risk," and force them to use quotas to make sure each group gets exactly the same share of loans and leases. Such an act, the letter noted, is intentional discrimination.
"Intentional housing discrimination is exactly what Congress outlawed in 1968. It has no place whatsoever in this country," the letter said.
The letter is co-signed by the American Financial Services Association, Community Home Lenders Association, Consumer Mortgage Coalition, Council for Affordable and Rural Housing, Financial Services Roundtable, Housing Policy Council, Independent Community Bankers of America, Mortgage Bankers Association, National Affordable Housing Management Association, National Apartment Association, National Association of Federal Credit Unions, National Association of Housing Cooperatives, National Leased Housing Association and National Multi Housing Council.
For the full letter, use the resource link.
WASHINGTON (7/31/13)--Credit unions can discuss whether they support the National Credit Union Administration's proposed e-filing regulation, and can detail any unintended consequences the proposed rule could create for them, in a new Credit Union National Association comment call.
Credit unions that currently file their reports manually can also address whether the regulation will create undue hardship for them.
The proposed rule, released at the NCUA's July open board meeting, would require all federal credit unions to electronically file their financial, statistical and other reports. If the rule is adopted, the reports would have to be filed using the agency's information system or other means specified by NCUA.
Manual filing would no longer be an option.
A computer with internet access and an e-mail address are all that would be needed to comply with this rule, the agency stressed last week.
CUNA has asked that credit unions forward all comments by Aug. 15.
For the full CUNA comment call, use the resource link.
ALEXANDRIA, Va. (7/31/13)--The changing interest rate environment, and how that environment could ultimately impact credit unions, is addressed by National Credit Union Administration Chief Economist John Worth in a new YouTube video.
The video is the latest in a series of YouTube videos to inform the public and credit unions about general economic and credit union specific developments.
The videos can also be viewed on the NCUA's YouTube page by using the resource link below.
WASHINGTON (7/31/13, UPDATED 11:36 a.m. ET)--A senior Republican member of the House, and full committee chairman, has publicly endorsed the continued tax-exempt status of credit unions in any tax reform plan, noting he is "opposed to increasing taxes, including raising taxes on credit unions."
Rep. Mike Rogers (Mich.), chairman of House Intelligence Committee, added that credit unions play a critical role in the nation's economy.
"As deregulation of portions of the financial services sector narrows the operational gap between banks and credit unions, some have advocated changes in the tax and regulatory structures that govern them," he said.
"However, the fact of the matter is that credit unions hold a unique and crucial place in the nation's financial system and deal with different types of clients than most commercial banks. Due to credit unions' effectiveness in serving the needs of their members, I am particularly cautious about altering the regulatory framework that has long served them."
Michigan Credit Union League & Affiliates CEO David Adams thanked Rogers for standing up for credit unions.
"The entire credit union community should be deeply appreciative of Congressman Mike Roger's statement of support for the credit union tax exemption," Adams said.
"As chairman of the House Intelligence Committee, Congressman Rogers has tremendous influence on policy matters in the House of Representatives. This clear and strong statement of support will carry a lot of weight with his colleagues."
Rep. Dan Kildee (D-Mich.) has also spoken out in support of the credit union tax exemption, as has Sen. Mark Begich (D-Alaska).
Friday, July 26, was the deadline for senators to submit their tax reform proposals to Finance Committee leaders. The lawmakers are now expected to begin to build legislation to create a comprehensive proposal for a new U.S. tax code.