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Washington

Sen. Baldwin Joins Growing List Supporting CU Tax-exempt Status

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MADISON, Wis.  (8/19/13)--
Click to view larger image U.S. Sen. Tammy Baldwin (D-Wis.) announced Wednesday her support for credit unions' tax-exempt status during a visit with the Madison, Wis., offices of the Credit Union National Association, CUNA Mutual Group, the World Council of Credit Unions and the Filene Research Institute. (Photo provided by CUNA Mutual Group)
U.S. Sen. Tammy Baldwin (D-Wis.) joined a growing list of lawmakers speaking out for credit unions when she told a standing-room-only crowd of credit union supporters in Madison, Wis., Wednesday that she fully backs credit unions' continued tax status as corporate tax-exempt institutions.

"Credit unions provide essential services to their members and communities that would otherwise go unmet," she said. "I have long supported and will continue to advocate that as not-for-profit financial cooperatives, credit unions deserve their tax-exempt status. As we move forward with comprehensive tax reform, I will continue to monitor the situation to ensure that access to credit union loans will not be put out of reach for Wisconsin families and small businesses."

Her remarks were made during a visit with employees of CUNA Mutual Group, the Credit Union National Association, the World Council of Credit Unions, members of the Wisconsin Credit Union League, and the Filene Research Institute.

Baldwin expressed pride in having the opportunity to represent the headquarters of CUNA, CUNA Mutual Group and the World Council. She noted that cooperative businesses are consumer-centric business models that add significant value for families and communities.

"Sen. Baldwin understands clearly that credit unions are not-for-profit cooperatives that continue to earn their tax status by providing benefits to consumers and communities in a direct and tangible manner," explained Tom Liebe, league vice president of government affairs. "Baldwin continues to be a strong and consistent supporter of cooperatives of all kinds and we are indeed fortunate to have her thoughtful and informed voice in the U.S. Senate."

Since the start of the recession in 2007, Wisconsin credit unions' members have saved more than $1 billion.  Nationwide, between 2005 and 2011, credit unions have saved their members between $4.3 billion and $8 billion each year. Moreover, their presence in the marketplace moderates the pricing of banks, which provides about $10 billion in benefits to all consumers every year.

Other key lawmakers who have spoken in favor of credit unions include Rep. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee overseeing the tax reform measures.

Legislators who have stated they support keeping the credit union tax exemption include House Financial Services Committee member Keith Rothfus (R-Pa.);  House Ways and Means Democrat Rep. Sander Levin and seven other Michigan legislators; and Joe Pitts (R-Pa.).  In Texas, 38 House and Senate members said they support credit unions, with 32 members  specifically mentioning their support for credit unions' tax-exempt status.

Credit unions have urged Congress to preserve their tax status by launching a website, www.DontTaxMyCreditUnion.org, and a nationwide campaign reminding the 96 million credit union member-owners about the financial benefits they would lose if credit unions' tax status were eliminated through congressional tax reform efforts.

CUNA's Dunn Provides Compliance Tips In WSJ Interview

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WASHINGTON (8/19/13)--Valuable tips for credit unions prepping to comply with a bevy of new regulations from the Consumer Financial Protection Bureau and others are provided in a recent Wall Street Journal Risk & Compliance Journal interview with Credit Union National Association Deputy General Counsel Mary Dunn.

Changes to ability-to-repay/qualified mortgage, high-cost mortgage, appraisals for higher-priced mortgage loan and escrow regulations are among those on the way.

Credit unions readying themselves for these and other upcoming mortgage regulation changes "need to be considering what they need to be doing differently, how what they are doing now needs to be changed, whether what they are doing now needs to be stopped, what new steps, what new costs do they have to incur," Dunn said. "In training for personnel, they have to make sure their personnel are following all the rules, and that is going to be a big deal," she added.

Credit unions are one of the most highly regulated groups in the U.S., and to help credit unions prepare, CUNA has made a range of resources available, Dunn noted. Those resources include webinars, seminars and other services. CUNA also continues to urge the CFPB to be mindful of the burden faced by credit unions as it tweaks these rules and introduces new regulations.

The Risk & Compliance Journal article also covers credit union regulatory basics. Overall, Dunn said, "there are far too many rules on the way credit unions operate."

The high cost of compliance results in credit unions diverting resources away from their main goal of serving their members, Dunn stressed.

For more on CUNA and credit unions in the media, see CUs Hit Paydirt With Media Coverage in today's News Now.

For the full interview, use the resource link.

Cheney Report Covers CU Hiring, Volunteer Prospects

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WASHINGTON (8/19/13)--Many credit union CEOs are planning to expand their work forces and pay existing employees more in the near future. This expansion shows that "credit unions are taking advantage of an improving economy..., rewarding their workers for helping them and their members get through the tougher days of the recession, and positioning themselves to help their credit unions grow and deliver more services to members," Credit Union National Association President/CEO Bill Cheney said in this week's edition of The Cheney Report.

The CUNA CEO detailed the results of CUNA's 2013-14 Staff Salary Report, which shows:
  • One in four credit unions will add full-time employees to their payrolls this year, with the proportion of new workers being brought in increasing with asset size; and
  • Four in every five credit unions plan to provide pay increases to their workers.
And, as credit unions move forward in this improving economy, Cheney said CUNA will find new ways to get credit union volunteers more involved. In the report, he cited recent comments from CUNA Chairman Pat Wesenberg. "We all know the incredible contributions that volunteers have made to the success of the movement--and how critical they are for our future," Wesenberg said. "With the many challenges before credit unions today--particularly in reducing the regulatory burden, addressing the issues of small credit unions and preserving our tax exemption--this added voice to our board deliberations is most welcome," she added.

Other topics touched on in this week's Cheney Report include:
  • The latest developments in the Federal Reserve's ongoing interchange case;
  • News about future National Credit Union Administration Board Member Richard Metsger; and
  • A "Don't Tax My Credit Union" campaign update.
Each Friday, The Cheney Report provides a valuable window into CUNA's actions on behalf of member credit unions and reinforces the value of CUNA membership. To sign up for The Cheney Report, click the resource link below and use the "subscribe" tab on the right of the page.

Past issues of The Cheney Report are also archived on cuna.org.

NEW: Sen. Levin, Rep. Holt State CU Tax Status Support

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WASHINGTON (UPDATED: 8/19/13, 1:30 P.M. ET)--The list of credit union tax status backers in the U.S. Congress continues to increase as that body remains in summer recess: Sen. Carl Levin (D-Mich.) and Rep. Rush Holt (D-N.J.) are the latest legislators to voice their support.

Levin, Michigan's senior senator, said he continues to "support the work of service-oriented, not-for-profit, member-owned credit unions and their tax exempt status." The senator's comments, which were released by the Michigan Credit Union League, come as members of Congress continue to work on a comprehensive rewrite of the U.S. tax code. Tax policy leaders have planned a "blank slate" approach to reform legislation, which would remove all tax expenditures from the code and would add back in those that make the grade (Michigan Monitor, Aug. 19).

Levin said he wants to see loopholes that big corporations use to pay less taxes closed and to add more revenue, but he said he doesn't think raising taxes on credit unions is the way to achieve that goal. "Tax reform efforts should not undermine our economy, or remove useful exemptions such as the tax exemption for credit unions," he said.

Rep. Holt's recent comments were similarly supportive. Responding to a New Jersey Credit Union League survey of that state's congressional delegation, Holt's office said the legislator supports the continuation of the federal tax exemption for the nation's credit unions (The Daily Exchange, Aug. 19). "He always has and will continue to support the credit union tax exemption because credit unions provide needed and valued services in our local communities," his staff added.

The legislators join Sen. Tammy Baldwin (D-Wis.), who last week told a standing-room-only crowd of credit union supporters in Madison, Wis., that she fully backs credit unions' continued tax status as corporate tax-exempt institutions. (See News Now story: Sen. Baldwin Joins Growing List Supporting CU Tax-exempt Status.)

Fed To Charge Holding Cos., Nonbanks For Supervision, Reg Costs

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WASHINGTON (8/19/13)--Large holding companies and certain nonbank financial entities will soon be assessed fees to cover the cost of supervision and regulation, the Federal Reserve reported on Friday.

The assessments will be charged to bank holding companies and savings and loan holding companies with $50 billion or more in assets, and board-supervised nonbank financial companies, the Fed said. 

Collected fees will be transferred to the U.S. Treasury. The Fed's final rule is required by the Dodd-Frank Wall Street Reform Act.

According to the Fed, the rule:
  • Addresses how the Fed determines which companies will be charged;
  • Estimates applicable regulatory and supervisory expenses;
  • Determines each company's assessment fee; and
  • Bills for and collects the assessment fees.
The final rule is scheduled to become effective Oct. 25, and institutions that will be subject to the fee assessment will be contacted around that time. Payments for the 2012 assessment period will be due no later than Dec. 15, the Fed said. The regulator estimates around $440 million will be collected from 70 companies during this assessment period.

Going forward, affected institutions will be notified of their assessment amounts no later than June 30 of the year following the assessment period. Payments will be due by Sept. 15 of each year.

For the full Fed release, use the resource link.