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Washington Archive

Washington

Sen. Enzi, Two Congressmen State Support Of CUs' Tax Exempt Status

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WASHINGTON (8/23/13)--A U.S. senator and two congressmen have added their support of credit unions' tax-exempt status to the growing list of congressional supporters, a further indication that credit unions' "Don't Tax My Credit Union" campaign is having an impact. They are U.S. Sen. Mike Enzi (R-Wyo.), and U.S. Reps. Steve Daines (R-Mont.) and Phil Roe (R-Tenn.).
 
A meeting with U.S. Sen. Mike Enzi (R-Wyo.) resulted in his stating his support for credit unions' tax exempt status. From left are: Chris Kemm of Mountain West Credit Union Association; Steve Higginson of Reliant FCU, Casper; Sen. Enzi; Brian Rohrbacher, Atlantic City FCU, Lander; Bill Willingham, WyHy FCU, Cheyenne; andVicki Nelson, River-Rail Community FCU, Casper. (Photo provided by Mountain West Credit Union Association)
Sen. Enzi affirmed his support of credit unions' status during a meeting with the Mountain West Credit Union Association and five Wyoming credit union leaders in Casper, Wyo.
 
"Today's meeting with Sen. Enzi was very positive," said Scott Earl, president/CEO of MWCUA. "He showed a great deal of support for credit unions' current cooperative structure and the value that credit unions bring to the community."
 
This was the first time Enzi had met with credit unions in Casper. MWCUA also is scheduling a meeting with him in Gillette.
 
Montana's Rep. Daines expressed his support of credit unions' status in a letter to the Montana Credit Union Network president/CEO Tracie Kenyon.
 
"Like you, I appreciate the important role that credit unions play for thousands of Montanans every day," he wrote in the Aug. 13 letter. "The service they provide to their members is particularly important to rural financing. I support the current tax exemption because credit unions are unique depository institutions that seek to meet the needs of their members rather than maximize profits."
 
He noted that although he does not serve on the House Committee on Ways and Means, which is overseeing the tax code reform, "I will work to encourage the committee to maintain this provision as it develops comprehensive tax reform legislation to make the tax code simpler and fairer."
 
"We are overjoyed by Congressman Daines' explicit support of credit unions' tax exempt status," Kenyon told News Now. "Although his tenure in Congress is short, he has quickly grasped the unique and important role that not-for-profit credit unions serve and articulated it in his written message."
 
Tennessee's Roe expressed his support in an e-mailed message Monday to Olan Jones, president/CEO of Eastman CU in Kingsport, Tenn. 
 
"In East Tennessee, credit unions play an important role by offering low-cost financial services to their primary shareholders: homeowners, families and small businesses," Roe said. "I support maintaining this tax exemption in order to keep credit availability high and the cost of borrowing low for American families and entrepreneurs.
 
"I will be sure to keep your thoughts in mind should this issue come up for a vote before the entire House of Representatives," Roe said.
 
The Tennessee Credit Union League coordinated a meeting recently with Roe and credit unions at United Southeast FCU in Bristol, Tenn. Comments by credit union members related to the Don't Tax My Credit Union campaign had a positive impact on Roe's position on credit unions' tax exemption.

"We organize our efforts so the credit unions are out front meeting with the members of Congress," league President/CEO Fred Robinson said. "We let them tell the story (about the impact on members), and their stories rang very true with Congressman Roe," he told News Now.
 
"We're meeting across the state right now and have met with half of the delegates. Many of them have supported [credit unions' tax exemption] verbally. Roe is the first to put it in writing, and we are very excited about that. The credit unions get all the credit," Robinson said.
 
The new supporters join a host of members of Congress who have recently stated their support of credit unions tax exemption, including Sens. Carl Levin (D-Mich.) and Tammy Baldwin (D-Wis.), and Reps. Rush Holt (D-N.J.); Keith Rothfus  and Joe Pitts, both Republicans from Pennsylvania; Sander Levin (D-Mich.); and seven other Michigan legislators.  In Texas, 38 House and Senator members said they support credit unions, with 32 mentioning specifically they support credit unions' tax exempt status.

CompBlog Covers CFPB 'Small Servicer' Basics

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WASHINGTON (8/23/13)--How does the Consumer Financial Protection Bureau define "small servicer" for the purpose of the new mortgage lending rules? Credit Union National Association Federal Compliance Counsel Colleen Kelly answers this and other questions in an ongoing CompBlog series examining the bureau's treatment of small servicers.

To qualify as a small servicer, Kelly notes that a mortgage servicer must:
  • Service, together with any affiliates, 5,000 or fewer mortgage loans; and
  • Service only mortgage loans for which the mortgage servicer (or an affiliate) is the creditor or assignee.
Housing finance agencies would also qualify as small servicers for the purposes of CFPB mortgage regulations, she adds. Housing finance agencies are any public body, agency, or instrumentality created by a specific act of a state legislature or local municipality empowered to finance activities designed to provide housing and related facilities, through land acquisition, construction or rehabilitation.

CFPB definitions of creditor, assignee and affiliate are also clarified in the blog post.

Closed-end consumer credit transactions secured by a dwelling--except for charitably serviced mortgage loans, reverse mortgages and mortgage loans secured by time share plans--will count toward the 5,000 loan cap, Kelly adds in another blog post. Loans obtained by merger or acquisition and coupon book loans may also be considered when making a cap determination.

Kelly also outlines which mortgage servicers will not qualify as "small servicers" under CFPB regulations.

According to the bureau, if a mortgage servicer and its affiliate service fewer than 5,000 mortgages each, but more than 5,000 mortgages combined, they would not be considered "small servicers."

A mortgage servicer that services 3,100 mortgage loans--3,000 mortgage loans it owns or originated and 100 mortgage loans it neither owns nor originated, but for which it owns the mortgage servicing rights--would also not count as a small servicer.

Use the resource link for more CUNA CompBlog posts.

NEW: Metsger Sworn In As NCUA Board Member

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WASHINGTON (8/23/13, UPDATED: 11:15 A.M. ET)--New National Credit Union Administration Board Member Richard Metsger outlined his vision for the credit union system in a private swearing-in ceremony on Capitol Hill this morning.

Click to view larger image Richard Metsger, left, was sworn in as the National Credit Union Administration's newest board member this morning by NCUA General Counsel Michael Mckenna. Looking on is Velma Hall, Metsger's mother. Credit Union National Association President/CEO Bill Cheney attended the ceremony. (Photo provided by NCUA)
"As I said during my confirmation hearing, my vision is for NCUA to be recognized as an agency that manages its own fiscal house well, proposes regulatory action that is effectively targeted to achieve the desired outcome without placing unnecessary burdens on the credit unions themselves and, above all, maintains the confidence and trust the American public places in their local credit union," Metsger said.

Metsger, who will serve as the 20th NCUA board member, was sworn in by NCUA General Counsel Michael McKenna.

"I will do everything within my power to fulfill the trust placed in me by the president and the Congress to ensure both the integrity and the continued safety and soundness of our nation's credit union system in a rapidly changing marketplace. For me, the most important task is the continued protection of the Share Insurance Fund, which protects credit union member deposits up to $250,000, from losses," Metsger added.

Immediately following the swearing-in, Metsger was scheduled to attend a reception in his honor at Credit Union House organized by the Northwest Credit Union Association. A number of credit union leaders from throughout the system, including the Credit Union National Association and state leagues, will be in attendance.

CFTC Approves CUNA-supported CU Swap Exemption Rule

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WASHINGTON (8/23/13)--A final rule that will provide credit unions and other cooperative businesses with a clearing exemption for certain swaps was published by the Commodity Futures Trading Commission (CFTC) on Thursday.
 
The Credit Union National Association supported the exemption proposal, which was opposed by the banks.

CUNA Deputy General Counsel Mary Dunn said the exemption ''will help minimize the additional costs and fees associated with mandatory clearing and provide flexibility for credit unions to use non-cleared swaps," However, she added, the exemption will not have a significant impact on the overall swap market because of the small number of entities eligible for the exemption.
 
The CFTC rule will permit credit unions and other co-ops with $10 billion or more in assets to avoid swap clearing requirements when loans are originated for members. This exemption also will be extended to swap transactions that are used to hedge against risks associated with member loans.

The CFTC published the final rule, "Clearing Exemption for Certain Swaps Entered Into by Cooperatives," Thursday in the Federal Register. The rule will become effective on Sept. 23.
 
The exemption would apply to cooperatives whose members are non-financial entities, financial entities to which the small financial institution exemption applies, and cooperatives. Credit unions and other financial institutions with under $10 billion in assets are already exempt under a separate CFTC final rule.
 
"As not-for-profit cooperatives, all well-managed credit unions, consistent with safety and soundness, should be able to elect not to clear swaps that are for the purpose of hedging interest rate risks," Dunn added.
 
For more on the CFTC final rule, use the resource link.

CFPB Report IDs Mortgage Servicer Missteps

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WASHINGTON (8/23/13)--Sloppy account transfers, poor payment processing and loss mitigation errors are some of the mortgage servicing mistakes identified by the Consumer Financial Protection Bureau's review of banks and nonbank mortgage servicing examinations undertaken between November. 2012 and June 2013.

The report covers supervising banks with total assets of more than $10 billion and nonbank servicers. There is  no specific mention of credit unions within the report, other than the fact that CFPB supervises banks and credit unions with more than $10 billion in assets.

The CFPB report highlighted "both the mortgage servicing problems throughout the industry and the challenges of making sure that nonbanks are following federal law," CFPB Director Richard Cordray said. Fixing both of these issues is a priority for the agency, he said.

The bureau responded to mortgage servicing concerns it found by alerting the company in question, outlining remedial measures, and, when appropriate, investigating the issue and determining if enforcement actions were warranted.

The report found that many nonbanks "lack robust systems" for ensuring they are following federal laws. Other issues identified in the CFPB report include:
  • Failure to adequately disclose mortgage loan transfers;
  • A lack of document handling protocols;
  • Failure to notify borrowers of a change in billing address;
  • Deceptive communications to borrowers about the status of loan modification applications;
  • Excessive delays in handling private mortgage insurance payment cancellations;
  • Late property tax payments;
  • Conflicting instructions for loss mitigation processes and inconsistent loss mitigation underwriting;
  • Lengthy application review periods;
  • Incomplete loan files; and
  • Poor procedures for requesting missing or incomplete information from consumers.
The CFPB said it responded to these issues by reviewing loss mitigation decisions and related fees or charges to borrowers to determine whether any reimbursement was appropriate, conducting periodic testing to monitor areas of concern, and requiring reports on the status of ongoing corrective actions.

For the full CFPB release, use the resource link.