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CUNA presses NCUA for real relief, BSA clarifications

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ALEXANDRIA, Va. (8/5/14)--Concerned that the cumulative regulatory burden on credit unions is at an "all-time high," the Credit Union National Association is urging regulatory relief for credit unions in a new letter to the National Credit Union Administration. The NCUA is currently in the process of its annual review of one-third of its regulations, a cycle that results in all regulations being reviewed over each three-year period.

"Advocating for a more favorable regulatory environment for credit unions is our top regulatory advocacy priority," CUNA's Deputy General Counsel Mary Dunn said. "The letter sent to NCUA yesterday cites all current rules, including those imposed by other agencies under the Dodd-Frank Act, as contributing to the regulatory burden."

The letter also urges the NCUA to establish a credit union cybersecurity council or working group that would "help identify and address data security concerns in a manner that recognizes the unique nature and needs of credit unions, without imposing a new layer of regulatory compliance." 

"In light of the imperative need to reduce credit unions' regulatory obligations, we urge NCUA to add new or expand existing rules only if required to do so by law, or doing so is clearly warranted based on a compelling safety and soundness reason that can be satisfactorily addressed in no other manner," Dunn stated in the letter. 

Agencies should refrain from categorizing changes as 'regulatory relief' unless the revisions result in less time and money being spent by credit unions to fulfill requirements, CUNA says.

The letter also advocates for consistency among regulators when it comes to enforcing Bank Secrecy Act compliance.

"We continue to hear of instances in which different regulators and examiners interpret BSA requirements and guidance differently, which makes it difficult for credit unions to satisfy examiners and plan accordingly throughout their organizations," the letter reads. "Greater consistency would also be helpful with the interpretation of requirements regarding BSA reports."

CUNA recommended a credit union's BSA examination be based on the "types of activities the credit union actually engages in and focus on its risks."

CUNA also recommended that the NCUA should provide a report on its website on how it plans to address recommendations received during the regulatory review process, as well as a summary of comments that were received, but not acted on.

CUNA will be sending the NCUA more recommendations for regulatory reductions in the coming weeks, as well as input on the agency's Economic Growth and Regulatory Paperwork Reduction Act request for comments, which are due by Sept. 2.

NEW: 62 CUs to pay total $57,750 for late-filing penalties

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ALEXANDRIA, Va. (8/5/14, UPDATED 2:28 p.m. ET)--Sixty-two credit unions were identified by the National Credit Union Administration as being subject to civil money penalties for the late filing of their first-quarter Call Reports and all 62 have consented to those penalties, the National Credit Union Administration announced today.
Those late filers will pay a total of $57,750 in penalties, with individual penalties ranging, the NCUA said, from $150 to $20,000. The median fine was $243. Under federal law any funds from civil money penalties must be sent to the U.S. Treasury.
Read News Now Wednesday for more.

NEW: 100M memberships reached at CUs nationwide

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WASHINGTON (8/5/14, UPDATED 11 a.m. ET)--Credit unions have reached and surpassed 100 million memberships nationwide--equating to one in every three Americans, the Credit Union National Association announced today.
The 100 million memberships count is based on data collected from credit unions and compiled by CUNA in its June 2014 "Monthly Credit Union Estimates." CUNA estimates that credit union memberships expanded by 2.9% in the past 12 months, from June 2013 to June 2014, and the 100 million mark was eclipsed in June. This represents a continuation, and acceleration,  of trends previously reported: In 2013 memberships expanded by 2.5% and in 2012 memberships grew 2.1%. CUNA expects the membership growth to continue in the second half of 2014 and exceed the full-year growth of the previous year.
Credit unions added a total of 2.85 million additional memberships over the past year--the largest reported increase in more than a quarter century. And, in percentage terms, the 2.9% increase was the fastest since 2000, according to the CUNA analysis.
"Clearly, there is growing recognition for credit unions among consumers," said CUNA President/CEO Bill Hampel. "They increasingly understand that a credit union places their interests above all else, particularly in returning financial benefits to consumer members in the forms of lower rates on loans, higher returns on savings, and lower and fewer fees." He added that, in 2013, those financial benefits totaled more than $6 billion.
Hampel pointed out that, as cooperatives, credit unions are owned by their members and exist to provide financial services to those members. Banks, he noted, which are owned by shareholders, exist to return profits to those shareholders.
"It's the structure of credit unions--as not-for-profit, democratically led and cooperatively owned financial institutions--that allows credit unions to maintain this focus on returning financial benefits to members," CUNA leader Hampel said. "In fact, by doing so, credit unions have earned the satisfaction and trust of their existing members--and are attracting even more."
At least two key measurements of consumer attitudes have recently underscored the reputation that credit unions have built among their members. At year-end 2013, the American Customer Satisfaction Index found, for the fifth straight year, that credit unions lead banks in customer satisfaction--scoring 85 out of 100, compared to 78 for all banks. Credit unions have topped banks in each of the five  years they credit unions have appeared on the index.
In 2013, the Chicago Booth Kellogg School Financial Trust Index showed that consumers trust credit unions more than banks. The index, sponsored jointly by the Kellogg School of Management at Northwestern University and the University of Chicago Booth School of Business,  showed trust in credit unions is 62% while trust in big banks is 28%.
CUNA Chief Economist Mike Schenk said other factors within the financial services marketplace have played key roles in the credit union growth. He noted that a growing number of consumers continue to express dissatisfaction with big Wall Street banks due to economic downturn and consumer movements such as Bank Transfer Day in 2011, when consumers were urged through a grassroots movement--and primarily on social media--to leave big banks and move their money to a credit union or small bank because the organizations tend to offer better rates and incur fewer fees.
"In 2010, credit union membership barely grew, expanding by just about 0.65%, or about 600,000 memberships," Schenk said. "But, with the spotlight turned in 2011 to the increasing fees banks were charging--particularly for debit cards and other products--and the additional publicity for the lower and fewer fees at credit unions by contrast, membership growth that year more than doubled over the previous year, by 1.4 million--and the rate of growth has increased in each subsequent year."
Schenk noted that not everyone can join the same credit union, but there is a credit union for everyone. He noted that consumers wishing to find a credit union they are eligible to join should visit, a website that includes a comprehensive credit union finder with every credit union in the country, and helps consumers learn more about credit unions.
Additionally: Hundreds of credit union members have shared their credit union stories with their photo on and social media to show they are part of an organization that focuses on their best financial interests. Learn more about the 100 million credit union memberships nationwide milestone by visiting

Legislators from farm states voice RBC plan concerns

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WASHINGTON (8/5/14)--Three legislators have joined more than 30 of their colleagues by writing the National Credit Union Administration to express concerns with the agency's risk-based capital proposal. Sens. John Thune (R-S.D.) and John Hoeven (R-N.D.), along with Rep. Jim Bridenstine (R-Okla.) sent their letters late last week.

Hoeven and Thune, who serves on the Senate Finance subcommittee on international trade, customs and global competitiveness, wrote on behalf of the 81 federal and state chartered credit unions in their state, which serve more than 450,000 members with assets of more than $5.5 billion total.

"We share the concerns of many of our colleagues … that your proposed regulations regarding risk-based capital could have unintended consequences that could negatively impact the availability and affordability of financial products offered to consumers," the letter reads, adding that many of the credit unions in the Dakotas serve agriculture-based communities.

Bridenstine's letter urges consideration of the effects the proposal would have on credit unions with high levels of concentration in assets such as member business loans, mortgages and long term investments.

"NCUA examiners already have the ability to mitigate concentration risk through other regulatory actions, it appears that the inclusion of concentration risk as a part of the calculation of capital rules could be redundant and place credit unions at a competitive disadvantage relative to other insured depository institutions," the letter reads.

Both letters also ask the NCUA to reconsider the proposed 18-month implementation period, which NCUA Chair Debbie Matz said will be changed.

In addition to legislators writing individually, 324 representatives signed a letter in May outlining issues with the proposal.

Mich., Wash. primary candidates win CU support

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WASHINGTON (8/5/14)--Primary elections today in Michigan and Washington feature several pro-credit union candidates. The candidates below have received maximum $5,000 in financial support allowed for primaries from the Credit Union Legislative Action Council (CULAC). CULAC has been involved with more than 300 Senate and House races this election cycle. 

In Michigan's 14th District, Democrat Rudy Hobbs has garnered support in his bid to replace Rep. Gary Peters (D), who is running for Senate. Hobbs will face three other Democrats in the primary.

Hobbs, a current state representative, has been an ally of credit unions throughout his tenure. During his candidacy for Congress, he has reached out to Michigan Credit Union League (MCUL) officials and local credit unions to learn about issues they face, and how federal legislation can impact them.

"Throughout his tenure in the Michigan House, Rudy Hobbs has been a fighter for consumers and has promoted affordable financial services for neighborhoods and businesses alike," said David Adams, CEO of MCUL and its affiliates in a statement. "We have no doubt he will continue to be a champion for his constituents and embody the credit union philosophy of 'people helping people' in Congress."

In Michigan's 8th District, Republican Mike Bishop is running for the seat currently held by Rep. Mike Rogers (R), who will not seek re-election. Rogers himself is a longtime credit union advocate, having pushed to keep the credit union tax status.

Bishop is a former state senator and representative, serving as Senate Majority Leader, chair of the Senate Banking and Financial Institutions Committee and the House Commerce subcommittee on banking and finance.

Adams called Bishop a "good friend" of credit unions during his time in the state legislature.

In the 2nd District, State Sen. John Moolenaar (R) has pledged to continue his support of pro-credit union initiatives and legislation during his campaign to replace Rep. Dave Camp (R), who has served since 1991 and announced he will not seek re-election.

Rep. Dan Benishek (R) will run against another Republican candidate for the chance to be elected to a second term in the state's 1st District. Benishek, a credit union member, has supported efforts to maintain credit unions' tax status and reduce regulatory burden.

Other credit union-supported candidates in primaries today include Debbie Dingell (D), running for Michigan's 12th Congressional District, and Washington state Rep. Dan Newhouse (R), running against 11 other candidates in the state's 4th District primary.

Rick Metsger named NCUA vice chair

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ALEXANDRIA, Va. (8/5/14)--National Credit Union Administration board member Risk Metsger has been named vice chair of the agency. NCUA Chair Debbie Matz announced the designation Monday.

"Rick has built on his experience and knowledge as a legislative leader and a credit union board member to become a strong, objective, and thoughtful regulator," Matz said in making the designation. "Rick is faithfully committed to our shared goal of protecting the safety and soundness of America's credit unions and the 97 million members who count on NCUA to insure their funds. During his time on the board, Rick has stood firm on regulatory principles, asked insightful questions, and strived toward sound public policy in our board decisions."

Click to view larger image National Credit Union Administration board member Rick Metsger, right, offers suggestions at the agency's board meeting last week, while Chair Debbie Matz listens. Matz named Metsger NCUA vice chair Monday. Pictured in back row, from left: Mike McKenna, NCUA general counsel and Steve Bosack, chief of staff. (CUNA Photo)
Credit Union National Association Deputy General Counsel Mary Dunn said CUNA welcomes the announcement: "This comes as recognition of Rick Metsger's key role in the credit union system."

Dunn noted that the agency's recent proposal to give credit unions more regulatory flexibility by managing their own fixed assets was a stated goal of Metsger when he was appointed to the agency in 2013.

She added that CUNA looks forward to continuing working with the new vice chair on the agency's risk-based capital proposal and on the range of regulatory issues that face credit unions.

Metsger was nominated by President Barack Obama in May 2013 and participated in his first board meeting in September of that year. His term will expire Aug. 2, 2017. He was named the NCUA representative on the board of NeighborWorks America on Jan. 1.

Previously he served in the Oregon state senate from 1999 to 2011, including a term as Senate President Pro Tempore. He also served in the board of Portland Teachers FCU, now known as OnPoint FCU, based in Portland, Ore with $3.4 billion in assets.