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CUNA campaign school kicks off in Albuquerque

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WASHINGTON (8/15/11)--More than 20 potential candidates, including local credit union representatives, joined the Credit Union National Association (CUNA) and the Credit Union Association of New Mexico (CUANM) as they presented 2011’s first CUNA campaign school in Albuquerque, N.M., last week.
Click to view larger image CUNA Senior Vice President of Political Affairs Richard Gose discusses campaign strategy with attendees of CUNA's Albuquerque campaign school, the first to be held this year. (Credit Union Association of New Mexico photo)
The 2011 campaign school was the third held in New Mexico. Topics covered in last week's session included campaign management, fundraising, message development, and get-out-the-vote planning. Potential candidates at the state's sessions planned to contend for a broad swath of positions in both local and state races, and represented candidates of both parties. Current mayor of Albuquerque Richard Berry (R) attended the first New Mexico campaign school before he defeated longtime incumbent Democratic Mayor Martin Chavez in 2009. The campaign school was led by CUNA Senior Vice President of Political Affairs Richard Gose and CUNA Vice President of Political Affairs Trey Hawkins, and also featured the advice of Washington, D.C.-based political communications consultant Michael Hook and Portland, Ore.-based political consultant Jon Isaacs. “We offer these campaign schools a service to first-time candidates, regardless of affiliation,” said Hawkins. “But our ultimate goal is to help more credit union professionals and volunteers run for and win elective office.” CUNA is scheduling a number of other campaign schools in anticipation of the upcoming 2012 elections.

Cheney sums up first year at CUNA looks to future

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WASHINGTON (8/15/11)--Debit interchange fee cap legislation, and the debate surrounding it, immediately became his predominant issue as Credit Union National Association (CUNA) President/CEO Bill Cheney succeeded former CUNA chief Dan Mica last year. Cheney recently reflected on his first year in charge of CUNA, which officially began on July 5, 2010. Stepping up to deal with the interchange issue presented quite a challenge, but Cheney told CUNA’s Credit Union NewsWatch that CUNA’s early work with legislators, and additional work after financial regulatory reform legislation was passed in July 2010, substantially improved the final Fed rule from what was first offered. “Our work had an influence on the Senate and we improved the situation for credit unions… and our job now is to make sure the two-tiered system is effective and make sure that we hold senators who voted against us on the delay, but assured us that the two-tiered system would work, accountable,” Cheney said. Other focuses of the past year were member business lending legislation, reducing credit unions’ regulatory burden, and further building credit unions’ grassroots muscle. Cheney traveled the country to hear directly from CUNA members on these and other issues. A major surprise was the amount of work CUNA has done this past year with the U.S. Treasury and the Consumer Financial Protection Bureau (CFPB). Cheney said that this groundwork will pay dividends going forward. “There’s a lot the Treasury and CFPB can do to help credit unions,” he added. CUNA has developed a close working relationship with the CFPB. CFPB seems to understand that eliminating and amending some regulations, rather than simply creating new regulations, is key to reducing the regulatory burden, Cheney said. Regulatory burden has been a key complaint of credit unions coast to coast. Cheney noted that the level of concern grows stronger in areas where economic troubles have hit hardest. His numerous meetings with credit unions, which are set to continue following the interview, have helped the CUNA CEO focus on what is important: improving the operating environment for credit unions. While the 2,500-mile move from California to Washington is a big change, Cheney said that he likes the change and the city of Washington. For more of Cheney’s interview, see the latest issue of CUNA’s Credit Union NewsWatch(member's only).

MasterCard CUNA team up for Aug. 17 interchange call

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WASHINGTON (8/15/11)--MasterCard's plans for a two-tiered debit interchange fee rate structure, how that rate structure will impact credit unions, and the anticipated time table for implementation will be covered during an Aug. 17 Credit Union National Association (CUNA) audio conference call. The hour-long call will be free for CUNA members and is scheduled to begin at 2 p.m. ET. A Q&A session will follow the prepared portion of the presentation. CUNA members will be able to register for the call beginning later today. CUNA Chief Economist Bill Hampel, CUNA Deputy General Counsel Mary Dunn, and MasterCard Global Head of Public Policy Shawn Miles will lead the call. CUNA President/CEO Bill Cheney noted that “credit unions offering debit cards to their members have many questions in the wake of the Federal Reserve Board's final rule on debit interchange,” and thanked MasterCard for working with CUNA on the audio conference. A similar call with VISA representatives is being planned. The Fed's final rule caps debit interchange fees for issuers with assets of $10 billion or more at 21 cents, and allows an additional five basis points per transaction to be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with Fed-established fraud prevention standards. CUNA also recently covered the interchange rule from a compliance perspective with a now-archived Aug. 3 webinar. For that webinar, use the resource link.

Alert on RSA security issues sent by NCUA

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ALEXANDRIA, Va. (8/15/11)--The National Credit Union Administration (NCUA) warned credit unions that RSA SecurID tokens that were issued before April 2011 should be replaced, adding that additional steps should be taken "to safeguard the servers that support the RSA authentication process." The NCUA said that RSA's SecurID authentication process may have been compromised during a March 18 security breach of that company's systems. The NCUA security alert was released late last week following a National Security Agency risk alert. RSA is the security division of EMC Corp. RSA's SecurID process provides two-factor authentication for online and internal network computer systems. One of those factors is an individual, separately generated password or personal identification number, paired with a second form of authentication. According to RSA, this two-step authentication provides "a much more reliable level of user authentication than reusable passwords." RSA security services are used by many high value companies. For the full NCUA alert, use the resource link.

NCUA will disclose CAMEL ratings to FISCUs

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ALEXANDRIA, Va. (8/15/11)--CAMEL ratings will soon be disclosed to federally insured state credit unions “during all insurance reviews and supervision contacts in which NCUA examiners are on-site,” the National Credit Union Administration (NCUA) said in a recent letter to credit unions (11-CU-12). NCUA examiners that are performing joint examinations with state credit union regulators will discuss, and attempt to resolve, any differences in the CAMEL scores of a given credit union. If differences cannot be resolved, NCUA examiners will disclose their CAMEL ratings "simultaneously and on schedule" with the state regulator--"but in no case later than the final meeting with credit union management and officials,” the NCUA said. The NCUA added that its examiners will disclose CAMEL ratings using guidance published in a December 2007 letter to credit unions (07-CU-12). The examiners also will provide “sufficient information supporting the basis for the assignment of individual component and composite ratings,” the agency added. CAMEL ratings will remain “sensitive and confidential” and will not be shared with third parties, the agency added. NCUA staff during last month’s July open board meeting reported that 19% of total credit union assets are held in CAMEL code 3, 4 and 5 credit unions. They added that the total number of CAMEL code 3 credit unions decreased by 16 between May and June. The total percentage of shares held in CAMEL Code 3 and CAMEL Code 4/5 credit unions also declined, dropping nearly 1 percentage point and 0.24 percentage points, respectively. For the full NCUA letter, use the resource link.

Inside Washington (08/12/2011)

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* WASHINGTON (8/15/11)--The House financial institutions and consumer credit subcommittee will meet in Georgia next week to ask community bankers and regulators if federal bank examination standards have become too stringent. The hearing in Newnan, Ga., will include testimony from three bankers--Chuck Copeland, CEO of First National Bank of Griffin; Jim Edwards, CEO of United Bank; and Gary Fox, former CEO of Barton County Bank, based in Cartersville, Ga., which failed in April (American BankerAug. 12). Also scheduled are witnesses from the Federal Deposit Insurance Corp., the Federal Reserve Board, and the Office of the Comptroller of the Currency. “With a struggling economy and high unemployment, small businesses and small-town banks need some relief from the growing regulatory burdens that block the creation of new jobs,” said Financial Services Committee Chairman Spencer Bachus (R-Ala.). “We cannot allow regulatory micromanagement of community banks to stifle prudent lending. Bank examiners must recognize the risks of over-regulation, and particularly avoid subjecting smaller financial institutions to undue regulatory burdens” … * WASHINGTON (8/15/11)--Federal Home Loan Banks (FHLB) are seeking an exemption from proposed risk-retention rules. About eight of the 12 banks in the FHLB system purchase mortgages from member banks, thrifts and credit unions (American Banker Aug. 12). The mortgages require credit enhancements, which are included in their purchase price. On average, the credit enhancement is similar to a 2%- to 3%-risk-retention requirement, the banks say. A proposed federal rule could include a 5% risk-retention requirement on the loans that the banks hold in portfolio and other underwriting restrictions on down payments and debt-to-income ratios. The FHLBs claim the additional retention requirements would make their loans too expensive, while the underwriting requirements will reduce their demand …

NEW NCUA warns of RSA security issues

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ALEXANDRIA, Va. (UPDATED: 11:10 A.M. ET, 8/12/11)—The National Credit Union Administration (NCUA) has warned credit unions that RSA SecurID tokens that were issued before April 2011 should be replaced, adding that additional steps should be taken “to safeguard the servers that support the RSA authentication process.” The NCUA said that RSA’s SecurID authentication process may have been compromised during a March 18 security breach of that company’s systems. The NCUA security alert was prompted after a National Security Agency risk alert was released late on Thursday. RSA is the security division of EMC Corp. RSA’s SecurID process provides two-factor authentication for online and internal network computer systems. One of those factors is an individual, separately generated password or personal identification number, paired with a second form of authentication. According to RSA, this two-step authentication provides “a much more reliable level of user authentication than reusable passwords.” RSA security services are used by many high value companies. For the full NCUA alert, use the resource link.