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Washington Archive

Washington

CUs' 'Don't Tax Tuesday II' Ups Message Total To 850,000

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WASHINGTON (9/12/13)--The newest phase of a credit union social-media advocacy blitz targeted at Capitol Hill to deliver the message "Don't Tax My Credit Union" paid off big Tuesday. It brought the total numbers of hits to the Credit Union National Association's www.DontTaxMyCreditUnion.org site to over one million views since being launched in May and helped the campaign generate an overall total of 850,000 messages to members of Congress.

"This campaign was more successful than we could have anticipated," CUNA President/CEO Bill Cheney said Wednesday. "The level of engagement we saw on Don't Tax Tuesday is a testament to the power of social media and to the dedication of credit union members, who value their credit unions so much that they actually want to stand together and advocate for protecting that value with lawmakers," he added.

The major social media push used Twitter, Facebook, as well as CUNA's own DontTaxMyCreditUnion.org websites--in Spanish and English--to generate over 5,000 tweets, 600 Facebook posts and 8,000 e-mails to lawmakers.

Overall, more than one million Twitter users were potentially exposed to the #DontTaxMyCU campaign yesterday--bringing CUNA's campaign total to more than three million social media users on Facebook and Twitter. Around 4,800 of the tweets made on Sept. 10 were specifically aimed at the Twitter accounts of Members of Congress. This total is double the result seen during the first #DontTaxTuesday campaign held in July.

CUNA's DontTaxMyCreditUnion.org website saw more than 69,000 page views yesterday, nearly seven times the daily average. And 70% of the nearly 23,000 unique visitors were first time visitors to the site--credit union members newly engaged in CUNA's campaign.

Use the link for more on CUNA's Don't Tax My Credit Union campaign.

NEW: NCUA Approves Final Version Of Fixed Asset Reg Changes

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ALEXANDRIA, Va. (UPDATED: 9/12/13, 10:15 A.M. ET)--The National Credit Union Administration just minutes ago approved a final version of fixed-asset regulation changes.

The changes include plain language revisions, new definitions and rewordings that impact the current fixed-assets rule, Section 701.36. That rule allows federal credit unions to purchase, hold and dispose of property necessary or incidental to their operations. These fixed assets include office buildings, branch facilities, furniture, computer hardware and software, and ATMs.

The amendments do not make any substantive changes to regulatory requirements. Rather, they are intended to clarify the rule by improving its organization, structure, and "ease of use."

The Credit Union National Association has spoken in support of these proposed fixed-asset rule changes.

CUNA and other commenters encouraged the NCUA to eliminate the current regulatory limit imposed on the ownership of fixed assets, which is 5% of a federal credit union's shares. Others suggested the NCUA could eliminate the current requirement to fully occupy premises acquired for future expansion.

The NCUA said these changes were beyond the scope of the current rule, but could be taken up at a later date.

A community charter expansion request filed by Peoples Advantage FCU, Chester, Va., and a proposed rule addressing charitable donation authorizations are the other items on today's open board meeting agenda.

The closed portion of the agency's board meeting is set to follow this morning's open session. NCUA supervisory activities are the lone item on that meeting agenda.

Watch Friday News Now for more on today's board meeting.

Third-Party Vendors, Risk Management Addressed In NCUA Report

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ALEXANDRIA, Va. (9/12/13)--Potential National Credit Union Administration actions to address third-party vendor issues and tips on understanding risk management are among the topics addressed in the latest edition of The NCUA Report.

In the Report, NCUA Chairman Debbie Matz reveals that the agency "will be asking Congress for authority over third-party vendors." Such vendors, she noted, could threaten credit unions' safety and soundness.

Matz in her monthly column recalled the situation that American International Group (AIG) faced during the economic crisis, when a small, unregulated division of that huge firm crashed the company. "Dangers to the credit union system could be lurking in such regulatory blind spots," Matz wrote.

Matz also highlighted other actions the NCUA is taking in the aftermath of the financial crisis. Those actions include:
  • Working to reduce concentration risks;
  • Addressing credit union due diligence standards; and
  • Strengthening risk-based capital requirements.
The NCUA and credit unions must also work to be forward-looking and anticipate emerging risks sooner, she emphasized.

Risk management was also the topic of the NCUA newsletter's Region III Report. In that article, the NCUA says it is developing guidance for examiners that discusses the objectives and benefits of using enterprise risk management (ERM) and its relationship to sound business practices that drive the overall risk management process.

The regulator says it does not consider ERM to be a regulatory requirement. Having a strong, internal control environment, combined with a comprehensive risk assessment process is regarded as sufficient, the NCUA wrote.

The Report notes that some credit unions have developed their own ERM programs internally, while others have hired outside consultants to help them implement policies and procedures.

"Either way, ERM should provide clear and concise risk information across the credit union and allow for prudent decision-making in a timely manner," the agency wrote.

Use the link for the full NCUA Report.

FDIC Clarifies Coverage Rules For Foreign Depositors

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ARLINGTON, Va. (9/12/13)--The Federal Deposit Insurance Corp. (FDIC) adopted a rule this week to make it clear that its insurance fund does not cover deposit by foreigners in overseas branches of American banks.

The FDIC called its action a "clarification" and noted that it applies even if the deposits are also payable at an office within the United States.

The agency action was sparked by a pending proposal by the United Kingdom's Prudential Regulation Authority (U.K. PRA) that the FDIC said has made it more likely that large U.S. banks will change their U.K. foreign branch agreements give "dual payability," making their U.K. deposits payable in both the U.S. and U.K.

"This action (by the U.K. PRA) has the potential to expose the (FDIC's) Deposit Insurance Fund to expanded deposit insurance liability and create operational complexities if these types of deposits were treated as insured," the FDIC noted in its final rule.

The clarification will protect the DIF against the liability that it "would otherwise face as a potential global deposit insurer, preserve confidence in the FDIC deposit insurance system, and ensure that the FDIC can effectively carry out its critical deposit insurance functions," it also noted.

The final rule does not affect the operations of overseas military banking facilities, which are established under statutory authority separate from state and federal laws that govern the broader banking industry.

NCUA Board Meeting Today Is Metsger's Debut

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ALEXANDRIA, Va. (9/12/13)--New National Credit Union Administration board member Richard Metsger will take part in his first agency board meeting today, and a final version of fixed-asset regulations will be the top item on the agenda.

NCUA board member Richard Metsger, right, speaks with (from left) Credit Union National Association Deputy General Counsel Mary Dunn, CUNA General Counsel Eric Richard and Northwest Credit Union Association President/CEO Troy Stang before his Senate confirmation hearing earlier this year. (CUNA Photo)
This will be the first board meeting held since Metsger was sworn in on Aug. 23. The NCUA did not hold an August board meeting.

 A proposed version of the fixed-asset rule changes included plain language revisions, new definitions and rewordings that impact the current fixed-assets rule, Section 701.36. That rule allows federal credit unions to purchase, hold and dispose of property necessary or incidental to their operations. These fixed assets include office buildings, branch facilities, furniture, computer hardware and software, and ATMs.

The Credit Union National Association has spoken in support of these proposed fixed-asset rule changes, noting the amendments would clarify the regulation by improving its organization, structure and ease of use. However, CUNA did suggest some improvements.

Other items on today's NCUA agenda include:
  • A community charter expansion request filed by Peoples Advantage FCU, Chester, Va.; and
  • A proposed rule addressing charitable donation authorizations.
The closed portion of the agency's board meeting is set to follow this morning's open session. NCUA supervisory activities are the lone item on that meeting agenda.

Watch CUNA News Now and the News Now twitter feed, @NewsNowLiveWire, for up-to-the-minute coverage of today's board meeting.

Cordray: CUs, Small Lenders Affected ATR Rule

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WASHINGTON (9/12/13)--The comments and concerns of smaller lenders, like credit unions, were credited by Richard Cordray with helping to shape the Consumer Financial Protection Bureau's Ability-to-Repay rule.
 
CFPB Director Cordray said Wednesday that the Ability-to-Repay rule illustrates how the CFPB is a "data-driven" agency, which conducts research and solicits input from all stakeholders--consumer advocates, industry members, and public officials--before finalizing a rule. He was addressing the American Mortgage Conference in Raleigh, N.C.
 
Through information provided by smaller creditors, Cordray said, the CFPB "came to recognize that most of their traditional lending practices should not be put into question by the Ability-to-Repay rule."
 
"Especially where smaller institutions make loans that they keep in their own portfolios, they have every incentive to pay close attention to the borrower's ability to repay the loan. They are more immediately subject to community norms, and their underwriting standards did not deteriorate in the heady days before the financial crisis; indeed, they often lost market share to those engaged in the more irresponsible lending practices of that era.
 
"So we avoided a 'one-size-fits-all' approach by proposing and then finalizing specific provisions to meet the special circumstances of smaller mortgage lenders," he told his mortgage lending audience.
 
Even in May, the CFPB added changes to the ATR rule effective in January, changes intended to make it easier for some credit unions and other small creditors to make mortgage credit available to their communities by exempting them from some provisions of the rule.
 
The CFPB noted that the amendments are intended to facilitate access to credit by creating the specific exemptions and modifications to its Ability-to-Repay rule for small creditors, community development lenders, and housing stabilization programs.
 
Credit Union National Association President/CEO Bill Cheney, who was contacted by Cordray personally before the amendments were announced, thanked the director for being responsive to concerns raised by CUNA, the state credit union leagues, and credit unions.

NCUA Wants To Attract More Vets In Its Work Force

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ALEXANDRIA, Va. (9/12/13)--The National Credit Union Administration Wednesday announced that the agency has joined forces with the Department of Veterans Affairs (VA) to create more employment opportunities for veterans. The partnership is also intended to promote "greater work force diversity" in the agency through the Feds for Vets program.
 
A memorandum of understanding signed today by the agencies launches the cooperative effort. The NCUA noted in a release that it is the first financial services regulatory agency to partner with the VA in the program, which is part of the Obama administration's national strategy aimed at increasing the number of veterans in the federal work force.

NCUA Chair Debbie Matz said, "America's servicemen and women have given so much of their time and talents to our nation, and they bring valuable skills and experiences to the workplace. We want to tap into this pool of eligible workers, who also have a deep commitment to public service. The Feds for Vets program will expedite the hiring process and find qualified employees for NCUA to hire."

Since November 2009, NCUA has hired 128 veterans, 22% of agency hires in that time period. Matz said the agency would "benefit tremendously" from the partnership with the VA in terms of greater efficiency in the hiring process and timely access to a large pool of job candidates, with the result that more veterans will join NCUA's workforce.

NCUA's responsibilities under the agreement include:
  • Using the VA for Vets website and promoting it through the agency's own websites;
  • Training staff in the veterans' hiring process and use of the VA for Vets website;
  • Providing links to agency job opportunities to the site; and
  • Tracking and reporting on marketing, outreach, recruitment and hiring goals.
VA's obligations include:
  • Providing consultation services, including providing training and tools for human resources staff, recruiters and hiring managers;
  • Providing targeted marketing and outreach through social media, service organizations, veterans' associations and other outlets; and
  • Developing and posting job announcements and matching veterans to opportunities at the NCUA.