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Inside Washington (08/31/2012)

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WASHINGTON (9/4/12)--The Federal Deposit Insurance Corp. (FDIC) Friday released a list of financial institutions that will undergo Community Reinvestment Act (CRA) examinations in the fourth quarter of 2012. The agency noted that its CRA examination schedule is subject to change ...

CUNA leagues arrive in Charlotte to advocate for CUs at DNC

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CHARLOTTE, N.C. (9/4/12)--The Democratic National Convention (DNC) kicked off Monday with a day of family-oriented activities prior to the launch of official convention events, and credit union representatives, including staff from the Credit Union National Association (CUNA) and the state credit union leagues, are here to raise the profile of credit unions and credit union issues during this convention week.

Click for slide showThe nation observed Labor Day Monday and the Democratic National Convention organized a family-oriented event in Charlotte, N.C. to serve as a kind of "soft launch" to official convention events that start today.
Credit union participation in the Monday through Thursday DNC, as well as last week's Republican National Convention (RNC) in Tampa, Fla., follows a long tradition, started in 1988, of keeping credit unions and the credit union philosophy of "people helping people" in the national spotlight at the political conventions.

This week's credit union activities come on the heels of a successful RNC presence, which included the participation of Ann Romney--wife of Republican presidential candidate Mitt Romney--participating in a CUNA- and league-sponsored event. 

Ann Romney helped CUNA President/CEO Bill Cheney and representatives from CUNA, the Southeastern Credit Union Foundation, the League of Southeastern Credit Unions, the National Journal Group, CUNA Mutual Group, CO-OP Financial Services and  others at a ribbon cutting ceremony for a new therapeutic playground at All Children's Hospital in St. Petersburg, Fla. 

At the top of her remarks at the ribbon cutting ceremony, Romney thanked credit unions for their fundraising efforts that made the playground project possible.

A comparable "leave-behind" project will be a credit union highlight this week in Charlotte when, on Wednesday, credit unions will unveil a renovated rooftop playground for young patients at Levine Children's Hospital--a project that has been in the design and creation process for many months. Assistant House Democratic Leader Jim Clyburn (D-S.C.), will join CUNA CEO Bill Cheney and National Journal Editor-in-Chief Ron Fournier in cutting the ribbon on the playground.

This year's Charlotte playground renovation efforts received extensive local media coverage, as demonstrated here, in a group shot with volunteers and a local news reporter. (Photo provided by the North Carolina Credit Union League)


Also during the convention, CUNA is a sponsor of the National Journal's Convention Daily Briefings, which will feature party newsmakers here, as it did in Tampa.

The on-site events feature moderators such as Ron Brownstein, a two-time finalist for the Pulitzer Prize for his coverage of presidential campaigns and National Journal Group's editorial director;Chuck Todd, the chief White House correspondent for NBC News; Good Morning America co-host George Stephanopoulos; and NBC correspondent Chelsea Clinton, as well as speakers and panelists such as Rep. Nancy Pelosi (D-Calif.) and former Republican senator from Mississippi Trent Lott.

On Wednesday, CUNA, CUNA Mutual Group, state credit union leagues, and credit unions will host an event to honor all delegates attending the convention at the Aria Tuscan Grill Restaurant. In addition to delegates, every Democratic member of the U.S. Congress has been invited and as of late last week more than 200 total invitees had accepted the initiation.

This, and a similar event at the RNA in Tampa, serve to draw convention dignitaries to a credit union-sponsored event to highlight credit unions, their operating  philosophy of "people helping people," and  credit union issues.

Trey Hawkins, CUNA vice president of political affairs, says CUNA participation in the national conventions overall is "an opportunity to continue to develop our political brand."  Hawkins adds, "The conventions are an opportunity to talk to and communicate with all of the policy and media and political elites in one place. That's an opportunity we want to take on behalf of credit unions."

Watch CUNA's News Now and its Twitter-fed updates on NewsNowLiveWire for up-to-the-minute coverage of credit union involvement at the DNC this week.

CFPB extends finance charge mortgage test comment deadline

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WASHINGTON (9/4/12)--The comment period for potential changes to the Consumer Financial Protection Bureau's (CFPB) definition of "finance charge" as it relates to mortgage loans and the agency's high-cost mortgage coverage test under the Home Owners Equity Protection Act has been extended until Nov. 6, the CFPB said on Friday.

The agency was scheduled to end the comment period for these proposed changes on Sept. 7.

"Stakeholders, including credit unions, leagues and CUNA will appreciate the additional time to review and consider how the proposals affect credit union operations," Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said following the announcement.

Under the CFPB's finance charge proposal, lenders would be required to include most up-front costs associated with a mortgage in the finance charge disclosed to borrowers. Loan charges or fees would need to be included in the finance charge, but late fees, delinquency or default charges, seller's points, some escrow payments and most insurance premiums would not need to be included.

The CFPB said it wants the APR "to be a more accurate reflection of the overall cost of credit."

CUNA in a July comment call asked credit unions which fees should be removed from or added into the proposed finance charge structure, and whether the proposed changes to the finance charge structure would create financial or compliance burdens for credit unions. For the comment call, use the resource link.

The CFPB's high-cost mortgage rulemaking would alter the coverage test for high-cost mortgages to account for the higher APRs that could be caused by the finance definition changes.

Both of these proposed changes are part of the CFPB's ongoing mortgage reform efforts, which include a project that would combine Truth in Lending Act and Real Estate Settlement Procedures Act disclosures into a single document.

"Last week, CFPB Director Richard Cordray told a CUNA audio conference that the agency wants to be mindful of concerns credit unions raise about the impact of their rulemakings, and the decision to delay the comment deadline is a small but positive step in that direction," Dunn added.

Membership loan increases good news for economy CUNA

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WASHINGTON (9/4/12)--Credit Union National Association (CUNA) President/CEO Bill Cheney said the addition of 1.3 million new members in the first half of 2012, as reported in National Credit Union Administration (NCUA) statistics released Friday, shows "more and more consumers are eager to take advantage of the financial benefits they can realize at credit unions."

The addition of 1.3 million members in just the first half of this year is more than credit unions realized in full-year 2010 and 2011 combined, and is the second-highest increase in the past decade. "Needless to say, 'Bank Transfer Day' seems to continue to have an impact," Cheney added.

The agency also reported a membership increase of 643,322 during the second quarter of 2012, and the 93.1 million credit union members nationwide deposited an additional $2.7 billion in savings into their credit unions, the NCUA added.

Total loan balances increased by 1.7% in the second quarter of 2012, bringing the amount of outstanding loans held by credit unions to $581.7 billion, the NCUA reported. This increase, the largest recorded since the fall of 2008, shows that credit unions "are playing an important role in efforts to create jobs, stimulate small businesses, and revitalize communities," NCUA Chairman Debbie Matz said Friday. 

First mortgage loans increased by 1.7%, new and used auto loans each rose by 2.8%, member business lending grew by 1.2%, and short-term small-amount loans increased by 23.9% during the quarter, the NCUA added.

This is the fifth straight quarter the NCUA has reported positive loan growth at credit unions. Moreover, first-half 2012 credit union loan originations topped $155 billion -- a $35 billion, 29% increase compared to same-period results in 2011. The total 2012 first quarter credit union loan originations set records on several fronts: The total granted, and the increases -- both in dollar and percentage terms -- far surpassed any results reported over the past 20 years, CUNA senior economist Mike Schenk said.

"With lending on the rise, it's also clear that credit unions are helping consumers and small businesses dig out of the great recession and help our nation's economy recover," Cheney said.

The credit union industry's overall performance grew stronger in almost every category during the quarter. "Assets, earnings, and net worth rose, as charge-offs, bankruptcy filings, and loan loss reserves declined," Matz said.

The agency reported:

  • Credit union net worth grew 2.1% to $102.4 billion;
  • Credit union industry total assets increased 0.6% to $1.007 trillion;
  • Total savings increased 0.3% to $868.8 billion; and
  • Credit union net income increased by 2.9% to $2.13 billion.
The overall credit union delinquency ratio fell by 24 basis points (bp), totaling 1.2% at the end of the second quarter. Credit unions' net charge-off ratio declined by 3 bp, totaling 0.75% at the end of the quarter, and new bankruptcy filings fell by 17.3% when compared to the previous quarter's total. However, the agency reported, the percentage of loans that were charged off due to bankruptcy increased to 21.4%. Bankruptcy-related charge-offs accounted for 20.8% of charged-off loans reported in the previous quarter, according to the NCUA.

For the full NCUA release, use the resource link.

CUNA doc updates CFPB priorities

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WASHINGTON (9/4/12)--The latest information on the Consumer Financial Protection Bureau's (CFPB) mortgage, remittance and general supervisory work is covered in a new Credit Union National Association (CUNA) regulatory update on that agency's projects.

The CUNA document reports on many CFPB priorities, including the agency's recent work regarding ability to repay mortgage rules, appraisals, mortgage origination and servicing standards, remittance transfers, and the Home Mortgage Disclosure Act. Details and links to documents addressing the CFPB's ongoing project to combine Truth in Lending Act and Real Estate Settlement Procedures Act disclosures into a single document are also provided in the release.

The document is current as of Aug. 31.

For the full release, use the resource link.

NEW NCUA notes loan membership increases in 2012 2Q

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ALEXANDRIA, Va. (UPDATED: 12:45 p.m. ET, 8/31/12)--The total amount of loans made by credit unions increased by 1.7% in the second quarter of 2012, bringing the total amount of outstanding loans held by credit unions to $581.7 billion, the National Credit Union Administration (NCUA) reported. This increase, the largest recorded since the fall of 2008, shows that credit unions "are playing an important role in efforts to create jobs, stimulate small businesses, and revitalize communities," NCUA Chairman Debbie Matz said today.

This is the fifth straight quarter the NCUA has reported positive loan growth at credit unions.

Matz in an NCUA release noted the credit union industry's overall performance grew stronger in almost every category during the quarter. "Assets, earnings, and net worth rose, as charge-offs, bankruptcy filings, and loan loss reserves declined," she said.

The agency reported:

  • Credit union net worth grew 2.1% to $102.4 billion;
  • Credit union industry total assets increased 0.6% to $1.007 trillion;
  • Total savings increased 0.3% to $868.8 billion; and
  • Credit union net income increased by 2.9% to $2.13 trillion.
The agency also reported a membership increase of 643,322 during the quarter, and the 93.1 million credit union members nationwide deposited an additional $2.7 billion in savings into their credit unions.

The Credit Union National Association's (CUNA) economics and statistics staff continues to comb through these NCUA numbers, and a CUNA analysis will be featured in Tuesday's issue of News Now.