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Cheney Report Describes Fall Reg Relief Prospects

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WASHINGTON (8/5/13)--Regulatory relief is increasingly of interest in Congress, as financial institutions--especially credit unions--have made it very clear that is their top priority. Some have said this fall could represent the best chance for enacting relief legislation since 2006, Credit Union National Association President/CEO Bill Cheney noted in this week's edition of The Cheney Report.
However, moving regulatory relief measures through the Congress is "still a tricky proposition," he said. The debt ceiling, housing finance reform and other issues will also be on the docket, and some have said efforts to undo the Dodd-Frank Act or other controversial approaches "could make the whole effort collapse."
CUNA will first look to ensure that any regulatory relief measure that benefits community banks contains equal aid for credit unions. "For example: Any legislation that provides significant capital relief for community banks (such as easing Basel requirements) must also address capital concerns of credit unions (such as through supplemental capital)," Cheney wrote.
Ultimately, Cheney said CUNA expects Congress to consider one large regulatory relief legislative package that includes a number of relief proposals for credit unions and community banks. Such a bill could come from House or Senate financial services committees.

This week's Cheney Report also includes:
  • Details on recent interchange fee cap litigation;
  • CUNA concerns regarding the National Credit Union Administration's derivatives proposal; and
  • An update on how legislators are responding to the Don't Tax My Credit Union! campaign.
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

Sept. 3 Is NCUA Comment Deadline on E-filing Plan

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WASHINGTON (8/5/13)--The 30-day comment period set by the National Credit Union Administration for its plan to require all federally insured credit unions (FICUs) to file financial, statistical and other reports electronically will end Sept. 3, according to an Aug. 2 Federal Register  document.
When the agency proposed the change at its July 25 open board meeting, staff noted that a 30-day public comment timeframe, rather than the more-typical 60-days, would be sufficient NCUA for what the agency considers a "simple" change.
If the rule is adopted, the reports and credit union profiles would have to be filed using the agency's information system or other means specified by NCUA. Manual filing would no longer be an option, so every FICU would have to maintain a computer with internet access and an e-mail address.
The Credit Union National Association has issued a Comment Call seeking credit unions' views on the proposal by Aug. 15.  Use  the resource link to access that and other CUNA Comment Calls, as well as the Federal Register  document.

Judge Dismisses Challenge To Dodd-Frank Constitutionality

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WASHINGTON (8/5/13)--A district court judge last week dismissed a case that challenged the constitutionality of the Consumer Financial Protection Bureau and the Financial Stability Oversight Council and sought to overturn the appointment of CFPB Director Richard Corday.

U.S. District Court for the District of Columbia Judge Ellen Segal Huvelle said the defendants did not suffer an injury that is "concrete and particularized" and "actual or imminent, not conjectural or hypothetical." Further, she wrote, and injury that did occur could not be traced directly to the defendants.

"A decision along these lines was predicted by many observers and does not come as any surprise.  But this is one more indication that the CFPB will be with us for the foreseeable future," Credit Union National Association General Counsel Eric Richard said.
The suit was filed by State National Bank of Big Spring (Texas), the 60 Plus Association, and Competitive Enterprise Institute last year in federal court in Washington, D.C. Alabama, Georgia, Kansas, Michigan, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Texas, and West Virginia also joined the plaintiffs suit.
National Credit Union Administration Chair Debbie Matz and Cordray were among nine federal officials named as suit co-defendants because the officials are members of the FSOC. The case did not seek to challenge NCUA separately.
The bank argued that it was injured because it has incurred compliance costs in connection with the CFPB's mortgage servicing rule, because it has exited the market for issuing new mortgages due to the qualified mortgage rule and general uncertainty around the mortgage marketplace, and because it has exited the market for remittance transfers due to the CFPB's remittance rule. 

The bank noted that its compliance costs included staff time and spending approximately $10,000 to join a bank "Compliance Alliance" to keep up with CFPB actions and developments in the regulatory landscape.

NCUA Leaders Talk CUs, Confirmation

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ALEXANDRIA, Va. (8/5/13)--National Credit Union Administration Chairman Debbie Matz and board member Michael Fryzel on Friday welcomed their incoming colleague Richard Metsger, and addressed other key credit union issues, in remarks delivered at two separate conferences last week.

Metsger was confirmed to be the third member of the NCUA board by the full U.S. Senate on Thursday. All that remains to be done before Metsger takes his place on the board is for him to be sworn in.

Matz said Metsger's "personal commitment to public service, his breadth of policymaking experience and his unique perspective on financial services issues are welcome additions to the NCUA board."

Fryzel congratulated Metsger on his confirmation, adding that he looks forward to the former Oregon state senator joining the NCUA as it works to maintain a safe and sound credit union system.

The continuing resolution of the corporate credit union system will be one topic for Metsger to tackle once he is sworn in to the full NCUA board.

Fryzel on Friday told attendees of the American Association of Credit Union Leagues' 2013 summer meeting in Boston that the agency may not charge a Temporary Corporate Credit Union Stabilization Fund assessment in 2014. The Credit Union National Association has encouraged the agency to take this approach, and has said that future TCCUSF assessments may not be necessary at all.

Fryzel also addressed the credit union system in general in his remarks. Topics he touched on include:
  • Natural person credit unions, the overall economy and the challenges that lie ahead;
  • Pending and proposed rules, NCUA staff changes and the NCUA regional realignment;
  • Pending federal legislation that could affect credit unions; and
  • The future of credit unions.
In other remarks made before the African-American Credit Union Coalition's annual conference in Detroit, Matz said minority credit unions are essential to fostering economic diversity and opportunity in communities across America, particularly low-income and underserved communities.

Minority credit unions "are often the only insured institutions serving low-income and underserved areas," she noted. "Your being there--making loans to small businesses so they can provide jobs and offering loans so your members can buy a car or a home or send a child to college--has helped hard-working families in those communities pave a path towards financial security," she told the assembled credit union representatives.

The NCUA chairman also reiterated the agency's commitment to supporting greater diversity in its own workforce and in credit unions nationwide.

CUNA: REINS Act Is Nod To 'Creeping Complexity' Of Regulation

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WASHINGTON (8/5/13)--In a 232-183 vote that mostly broke down along party lines, the U.S. House just before breaking for its August recess Friday passed a bill that would require both chambers of the Congress to approve any federal rule that would bring with it a cost of $100 million or more.
Although a companion bill to the House's "Regulations from the Executive in Need of Scrutiny (REINS) Act" has been introduced in the Senate, Credit Union National Association Senior Vice President of Legislative Affairs Ryan Donovan noted Friday that the very partisan nature of the bill puts its future squarely into question.
Still, Donovan added, the discussions generated by the bills are important.
"This bill is symbolic recognition that Congress understands that many industries face what the credit union industry faces--a crisis of creeping complexity with respect to regulatory burden," he underscored.
"As the vote suggests, the legislation is quite partisan and because of that it is unclear that the legislation will be considered by the Senate.  
"Nevertheless, CUNA and credit unions will continue to work with Congress to produce bipartisan legislation that provides meaningful regulatory relief for credit unions," he noted.
As Donovan noted in a July 31 article in American Banker (News Now Aug. 1), many see regulatory relief for smaller financial institutions as one of the few items that can gain bipartisan approval in a log-jammed Congress this year.

He warned, however, that, to go forward, any relief measure that addresses both credit unions and small banks must contain benefits that are balanced for both parties.

Budget Prep Is Topic Of Aug. 13 NCUA Webinar

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ALEXANDRIA, Va. (8/5/13)--Budget preparation issues will be the topic of an Aug. 13 National Credit Union Administration webinar.

NCUA Office of Small Credit Union Initiatives Economic Development Specialist Vanessa Lowe will discuss the rationale for designing and implementing a budget that captures the strategic mission of a credit union, and give tips on documentation gathering during the webinar. Participants will also have the opportunity to hear from a credit union that has used budget preparation techniques successfully in its strategic and business planning, the NCUA said.

The free webinar is scheduled to begin at 2 p.m. ET. Webinar participants may submit questions in advance by sending an e-mail to The subject line of the e-mail should read, "Budget Preparation Webinar."

To register for the NCUA webinar, use the resource link.

CUNA, DCUC: DoD Rules Must Recognize CU Difference

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WASHINGTON (8/5/13)--The U.S. Department of Defense must recognize the unique nature of credit unions, including the 85 years of direct support provided by on-base credit unions, as it develops enhancements to some of the consumer credit protections offered to servicemembers and their families, the Credit Union National Association and the Defense Credit Union Council said in a joint comment letter.

Credit unions' support of servicemembers and their families is "a support built on trust and confidence; a support that has never waned...either in peace or war; in good economic times or not," CUNA Deputy General Counsel Mary Dunn and DCUC President/CEO Roland Arteaga emphasized in the letter.

Dunn and Arteaga in the letter noted that both CUNA and DCUC, and their member credit unions, have supported existing DoD consumer credit rules since they were issued in 2007. The current rule "has been an effective tool in protecting military consumers and curbing predatory lending," they said, and should not be altered. Doing so "will likely create unintended consequences and could jeopardize the extension of consumer credit to our troops and their families," they wrote.

Overall, CUNA and DCUC said any regulatory changes that are made should only address those lenders that seek to take unfair advantage of military members and their families.

"We strongly support the imposition of firm enforcement actions on predatory and abusive entities, but urge DoD to ensure regulated financial institutions, including credit unions, are not negatively impacted by future changes," the letter added.

The DoD is considering consumer protection changes as it prepares its report to the Committees on Armed Services of the Senate and House. CUNA and DCUC said they would work with the DoD as it prepares this report, which is due by Jan. 2.

For the full comment letter, use the resource link.