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Ways & Means Chair, New Fin. Services Member Support CUs

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WASHINGTON (8/14/13)--As credit unions continue their tax status advocacy efforts, Rep. Dave Camp (R-Mich.), who is currently working on tax reform measures as chairman of the House Ways & Means Committee, noted the "very important role" credit unions play in communities across Michigan and the rest of the country.

"I will continue to look for ways to reduce regulatory burden and to help credit unions in their mission of serving consumers and small businesses with affordable financial services," Camp added in a statement delivered to the Michigan Credit Union League & Affiliates.

"The significance of this statement is that the chairman has made a very clear and strong statement of support for credit unions and the need to help them with their mission of serving consumers and small businesses," MCUL & Affiliates' CEO David Adams said.

Camp and Senate Finance Committee Chairman Max Baucus (D-Mont.) have talked tax reform in town hall-style field meetings across the country, and tax reform is likely to be on the agenda when Congress returns in September.

Another key legislator, House Financial Services Committee member Keith Rothfus (R-Pa.), has joined the list of credit union tax-status backers in Congress, telling Pennsylvania credit union representatives he would continue his support to keep "credit unions out of the tax column."

Others that have spoken out in support of credit unions include ranking House Ways and Means Democrat Rep. Sander Levin and seven other Michigan legislators, as well as Rep. Joe Pitts (R-Pa.). The Cornerstone Credit Union League has also reported positive results to Texas credit unions: 38 House and Senate members state their support of credit unions, with 32 of those members specifically stating their support for the credit union tax status.

Credit union leagues are advocating for the credit union tax status in the press, through social media, and in person during this August recess. (See News Now story: CUs' 'Don't Tax' Message Resonates.)

NEW: Judge to Fed: Have An Interim Rule Decision By Next Week

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WASHINGTON (8/14/13, UPDATED: 12:25 P.M. ET)--Judge Richard Leon this morning set a swift schedule for the Federal Reserve Board to revise its debit interchange cap rule, asking Fed attorneys to return to his court room within one week with the board's thoughts on issuing an interim final rule.

He also asked for an interim final rule implementation timeline. The Fed needs to move expeditiously, Leon stressed.

The Fed attorney said there are a range of options for responding to the debit interchange issue.

Leon today extended the current stay on the interchange rule for an additional week. He also set a schedule for discussing damages and other issues related to the case. That hearing will be held in 30 days.

"CUNA will continue to follow the progress of debit interchange. It is a serious issue for credit unions and we are exploring a variety of options to ensure credit unions' interests are protected in any changes to the debit interchange regulation," said CUNA President/CEO Bill Cheney.

Today's U.S. District Court for the District of Columbia hearing follows Leon's July 31 decision to strike down the Fed's price caps on debit interchange fees. He ruled at that time that the Fed did not follow narrow congressional intent when it implemented the cap and other changes imposed by what is known as the Durbin amendment.

He also said in that ruling that the Fed would have some time to redraft its rules--but did not specify how much time.

NEW: Metsger Swearing In Set For Aug. 23

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ALEXANDRIA, Va. (UPDATED: 8/14/13, 2:10 P.M. ET)--Richard Metsger will be sworn in as the third member of the National Credit Union Administration's three-person board on Aug. 23.

The swearing in will take place at a private ceremony on Capitol Hill. Metsger will fill the seat vacated late last by then-board member Gigi Hyland. His term is scheduled to run until Aug. 2, 2017.

Credit Union National Association President/CEO Bill Cheney said CUNA looks forward to working with Metsger as he starts his tenure on the board. "We know that Mr. Metsger will be able to rely on his experience as a credit union board member in dealing with the challenges that credit unions face today," Cheney added.

NCUA Deputy Director of the Office of National Examinations and Supervision David Shetler will serve as Metsger's interim senior policy advisor until a permanent candidate is selected, the agency said.

Metsger is a former Oregon state senator. He was named as a candidate for the open NCUA board position by President Obama in June and was confirmed by the Senate for the post just before the U.S. Congress broke for its August recess.

Metsger will attend his first NCUA board meeting as a board member on Sept. 12.

Fryzel Commends Defense CUs' Good Work

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ALEXANDRIA, Va. (8/14/13)--"Keep thinking big, keep thinking long term, and keep your eye on a better future," National Credit Union Administration Board Member Michael Fryzel told the 477 attendees of the Defense Credit Union Council's 50th Annual Conference on Tuesday.

The NCUA official commended the assembled credit union representatives for continuing to offer "honest and reliable low-cost financial services with a global reach" to reduce the burden borne by servicemembers.

"The men and women of the armed forces join your credit unions because they understand value. They understand that, as is their own purpose, you are not seeking profit, but rather working for a higher goal. They understand you are looking to serve them just the way they are looking to serve their country," he said.

"You must keep up this good work for military members and their families," he added.

He also praised DCUC for its 50 years of service, and, encouraging the audience and the industry to "keep thinking long term," wished DCUC "50 more years of success."

"As you know, the path will not always be smooth, and it may not always be straight, but you and the industry as a whole must hold close to your vision," Fryzel added.

The conference also featured remarks from Credit Union National Association President/CEO Bill Cheney, Lieutenant General Kevin Byrnes (R) and keynote speaker Ernest Gregory, former Principal Deputy Assistant Secretary of the Army. Mary Martha Fortney, president/CEO of the National Association of State Credit Union Supervisors, and Congressional Medal of Honor recipient Peter Lemon are also scheduled to speak.

The DCUC conference is scheduled to run through Thursday.

Budgeting Basics Addressed In NCUA Webinar

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ALEXANDRIA, Va. (8/14/13)--Budgeting is a key-risk mitigation tool and serves as a manifestation of a credit union's chosen direction, National Credit Union Administration Economic Development Specialist Vanessa Lowe and Katia Marini-Nunez, director of St. Francis FCU, Greenville, S.C., said during a Tuesday webinar.

One way credit unions can mitigate risk is by using their budget as a monitoring tool, the speakers said. Credit unions can also use their budget as a strategic planning tool, and to monitor the relative success of different financial products.

When developing a budget, credit unions must understand their historic results and have a plan for the future. During the budget planning process, they should focus on the largest income and expense lines first. The presenters said credit unions should consider what their expenses and income have been, what is changing, and how expenses can be reduced and income can be increased.

Estimating future line items on a budget is key, and can be difficult, the presenters noted. As a budget is determined, credit union officials should have a formula for making good estimates. NCUA 5300 call report data can also be helpful for budgeting purposes, Lowe said.

Detailed descriptions are not needed for every item on the budget, they emphasized. Focus on the most important items, and try and provide the most clear information as possible detailing why you included those items in your budget, Lowe suggested to participating credit unions.

Allowance calculation is another critical task, and Lowe noted that some credit unions have moved into prompt corrective action territory during their examinations because they were not updating their allowance calculator, and were thus underreporting their allowance factor.

The webinar presenters also provided examples of loan planning and allowance calculation models. An advanced budget template was also worked through during the webinar.

The majority of credit unions that took part in the webinar said they hold between $10 million and $50 million in assets.

Other scheduled NCUA Office of Small Credit Union Initiatives webinars include:
  • A two-part webinar on small business lending for small credit unions scheduled for Sept. 17 and Sept. 25;
  • An Oct. 22 webinar on risk based lending;
  • A Nov. 14 webinar on dealing with employee dishonesty; and
  • A Dec. 17 succession planning session.
For more on Tuesday's webinar, use the resource link.