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Success for CU-supported candidates in some Mich., Wash. primaries

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WASHINGTON (8/7/14)--Four credit union-supported candidates in Michigan and one in Washington emerged victorious in close races in Tuesday's primary elections.

The winners in Michigan's primary were:
  • 1st District: Incumbent Rep. Dan Benishek won 70% of the vote over his opponent, Alan Arcand. Benishek has supported efforts to maintain credit unions' tax status;
     
  • 4th District: State Sen. John Moolenaar defeated two challengers--Paul Mitchell and Peter Konetchy--with 52% of the vote. Moolenaar has supported numerous pro-credit union initiatives;
     
  • 8th District: Former state senator and representative Mike Bishop (R) defeated his opponent, Tom McMillin, with 60% of the vote. A past chair of the state's Senate Banking and Financial Institutions Committee and a key player in an update of the state's credit union charter, Bishop will face Democrat Eric Schertzing in November; and
     
  • 12th District: Debbie Dingell (D), wife of retiring Rep. John Dingell (D), easily won her primary with 78% of the vote against challenger Raymond Mullins. She will face Republican Terry Bowman in November.
In Washington, Dan Newhouse (R), former state agriculture director, will advance to November's election and face fellow Republican candidate Clint Didier. The two topped the 12-person primary field, with Didier receiving 30.44% of the vote and Newhouse receiving 26.64%.

Several candidates backed by credit unions were defeated Tuesday, including current Rep. Kerry Bentivolio (R) in Michigan's 11th Congressional District.

Rudy Hobbs, a Democratic candidate for Michigan's 14th District, appears to have lost his primary by a slim margin. Unofficial results had candidate Southfield Mayor Brenda Lawrence with a 2,493-vote lead over Hobbs. The Detroit News reported Hobbs conceded the election early Wednesday morning, but the report also indicates the Hobbs campaign can request a recount.

Tennessee will hold its primaries today, with credit unions supporting Sen. Lamar Alexander (R) in his bid to be elected to a third term. Alexander has been a longtime supporter of credit unions. In a 2010 subcommittee hearing, Alexander expressed concerns about potential burdens on credit unions that would come with the creation of the Consumer Financial Protection Bureau.

Hawaii will hold its primary Saturday, and the Hawaii Credit Union League has supported state Rep. Mark Takai (D) in the race. Takai is running for the state's 1st Congressional District seat, the seat left open by current Rep. Colleen Hanabusa's (D) decision to run for Senate.

Both Alexander and Takai have been supported with a maximum $5,000 contribution from the Credit Union Legislative Action Council.

CUNA encourages CUs to describe latest exam via survey

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MADISON, Wis. (8/7/14)--The Credit Union National Association and state leagues are reminding credit unions to share their examination experiences through CUNA's online survey.
 
The survey gives credit unions the chance to provide feedback to CUNA and state leagues on their most recent examinations by the National Credit Union Administration or state regulators.
 
"We are particularly interested in hearing from credit unions that have been examined since the last time they completed the survey, or that have not completed this exam survey," said CUNA interim President/CEO Bill Hampel.
 
Paul Gentile, head of CUNA's Examination and Supervision Subcommittee, added, "Each credit union should want its exam story  to be heard through this survey so its individual experience is part of the whole narrative that CUNA is delivering to regulators." Gentile is president/CEO of the Massachusetts Credit Union League, New Hampshire Credit Union League and Credit Union Association of Rhode Island.
 
As of February, more credit union CEOs were satisfied with their exams (58%) than dissatisfied (27%), although this finding has slipped slightly from 2012's results of 61% and 25% ( News Now March 27).
 
The ongoing survey covers topics such as the length of an on-site exam, the satisfaction of the credit union with the exam and the results, and problems areas--if any--noted by the examiner. CUNA has provided an optional section where credit unions can identify and rate individual examiners.
 
"Advocating on credit unions' behalf to improve the examination process is one of the highest priorities of both CUNA and the leagues," Hampel said. "Addressing that priority requires that CUNA be very well informed on what has been going on in credit union examinations, both the good and the bad. That's why it is so vital that credit unions complete the survey."
  
Survey replies are confidential, and identifying information from individual credit union respondents will not be seen by individuals outside of CUNA's Market Research Department. Only summary results will be reported.

CUNA seeks CU comment on 'costly' new HMDA rule

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WASHINGTON (8/7/14)--The Credit Union National Association is seeking comment on additional reporting requirements proposed by the Consumer Financial Protection Bureau (CFPB), which would increase the burden on credit unions making home equity lines of credit (HELOCs).

The rule change would implement amendments made to the Home Mortgage Disclosure Act (HMDA) by the Dodd-Frank Act, as well as additional revisions proposed by the CFPB. The comment period is now open for the Regulation C changes.

In a recent letter to the CFPB, CUNA urged the bureau to exempt credit unions, as well as other community financial institutions, from the new additional proposed requirements in the proposed rule.

CUNA is most concerned with the proposed mandatory reporting of HELOCs, saying that "such reporting is currently optional and not required by statute."
 
The proposal requires credit unions to report more information on mortgage loan applications and originations, mandated by the Dodd-Frank Act--information that includes age, credit score, property value, occupancy type and more. The CFPB has also proposed to require additional reporting, including the first draw amount at account opening for HELOCs and other open-end lines of credit secured by a dwelling.

Many credit unions treat HELOCs more like consumer loans than mortgage loans, and therefore are often managed on different operating systems and platforms than traditional mortgage loan origination systems. CUNA believes this will lead many credit unions to have "extreme difficulties" providing the required HELOC data.

"The current rule already provides an option of reporting HELOC information for those institutions that have the capacity to do so," the letter reads. "To mandate reporting of all HELOCs for credit unions would be unwarranted and costly. Most important, this would be yet another requirement that would divert credit unions from actual lending or providing other needed member services."

CUNA is seeking comments on the proposed rule and will be filing a formal, detailed comment letter on the proposal before the comment period closes.

Use the first resource link below to access the CUNA letter letter. The Comment Call will be available through the second link once it is posted to the CUNA website.

Fixed-rate mortgages decline at banks post-QM rule

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WASHINGTON (8/7/14)--New Consumer Financial Protection Bureau (CFPB) mortgage rules are reducing the number of mortgages from all banks but the biggest, says the latest survey from the Federal Reserve. As reported in HousingWire Wednesday, the Fed's quarterly survey polled large domestic and foreign banks about the effect of the rules.

The CFPB's new qualified mortgage rule went into effect Jan. 10. The rule describes certain minimum requirements for creditors to make ability-to-repay determinations but does not dictate that one follows any particular underwriting model.

According to the report, almost 20% of the 36 large American banks said approval rate of prime residential mortgages was lower than it would have been. A "substantial share" of other respondents reported the rules were lowering approval rates.

The article also cites a similar report from credit rating agency Dominion Bond Rating Services that found federal regulations, along with a general shift to purchase activities from refinancing, have resulted in historically low mortgage originations and organic servicing growth.

The Credit Union National Association expressed concerns with the rule when it was in the proposal stage last year. In a survey conducted by CUNA in October, almost 60% of credit unions that responded said the new rule was making them consider scaling back mortgage practices.

In another CUNA survey conducted in April, 17% of respondents said the new rule had reduced or limited the number of first-mortgage loans the credit union is making. Of all respondents, only 1% said the rule had a "minimal positive impact," and 31% said it had no impact.

The remaining credit unions said the rule had a strong negative impact (7%), moderate negative impact (27%) or minimal negative impact (34%) on the ability of credit union members to get approved for a first mortgage.

Credit unions have seen a 45% drop in first fixed-rate mortgages issued in the first quarter this year after three straight years of growth. From January to March 2011, 89,037 first fixed-rate mortgages were granted, and that number rose to 134,016 during those months in 2012 and 154,185 in 2013. From January to March 2014, only 69,958 were issued.

CUNA also notes that this decrease could be due to a number of factors, including increasing real estate prices.

Balloon and adjustable-rate first mortgages saw an increase from 2013 to 2014 that was on par with previous year-to-year gains. In addition, fixed- and adjustable-rate second mortgages saw growth within normal ranges from year-to-year since 2011.