Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive


NACHA technical changes supported by CUNA

 Permanent link
WASHINGTON (9/26/12)--The Credit Union National Association (CUNA) in a comment letter said it supports the Electronic Payments Association's (NACHA) technical changes that would improve elements of the automated clearinghouse network, but also asked NACHA to limit additional implementation and compliance costs as it finalizes its proposal.

The NACHA changes would clarify the meaning or intent of some provisions, improve payment processing efficiency, and eliminate requirements that no longer add value to the ACH network.

One portion of NACHA's proposal would allow financial institutions that receive business debit entries to request proof of authorization from originating institutions, and would require those originators to provide that proof within 10 business days. CUNA suggested that NACHA could further clarify these changes by stating that the authorization requirement would only apply in the event of a dispute, or when charge receivers and originators do not have a pervious relationship. "The proposed requirement should not affect specified requirements under an existing contract or relationship between a business Receiver and Originator," CUNA Regulatory Counsel Dennis Tsang wrote.

The comment letter also suggested that NACHA minimize compliance burdens and permit the proof of authorization to be provided in whatever form is available instead of a specific data format.

Changes to stop payment processes and how erroneous transactions are handled are also addressed in the comment letter.

For the full comment letter, use the resource link.

CU advocacy on high gear before Nov. elections

 Permanent link
WASHINGTON (9/26/12)--With the 2012 elections just over one month away, credit unions, state leagues and the Credit Union National Association (CUNA) continue to advocate for credit union priorities, and remain active in campaign and voting efforts.

CUNA President/CEO Bill Cheney, fourth from right, and Kentucky credit union representatives meet with Sen. Mitch McConnell (R-Ky.), center, in Washington. (Kentucky Credit Union League photo)
Credit union and league representatives from Alabama, Florida, Idaho, Oregon, Washington, Utah, Nebraska, South Carolina, West Virginia, Kentucky, Vermont, Minnesota and Georgia have visited this month.

CUNA President/CEO Bill Cheney accompanied the Kentucky delegation as they visited Senate Minority Leader Mitch McConnell (R-Ky.) last week. The visit, which featured discussions of the regulatory burdens faced by credit unions, and how credit unions could help the economy if Congress approved legislation to increase the member business lending cap, was covered in McConnell's weekly e-newsletter.

Wisconsin credit unions and league representatives and credit unions from that state are scheduled to make their own hike next week, and Iowa, North Dakota and South Dakota credit union representatives have scheduled hikes for the post-election lame duck session of Congress, and other hikes may be added in the future.

CUNA Senior Vice President of Legislative Affairs Ryan Donovan said the scope of Congress's work after the Nov. 6 elections has not been determined, but CUNA expects consideration of the Sen. Mark Udall's (D-Colo.) Credit Union Small Business Jobs bill during the lame duck session.

"There are certainly a number of critical issues on Congress's plate after the election," Donovan said. "While the path Congress decides to take will be determined, in large part, on the outcome of the election, we are preparing for and look forward to a vote on Sen. Udall's bill in the post-election session."

Ahead of the elections, CUNA and the leagues continue to support credit-union friendly candidates, and CUNA Vice President of Political Affairs Trey Hawkins this week urged credit union supporters to advocate for greater support of credit union issues as legislators in their districts campaign for their respective positions.

The Minnesota Credit Union Network (MnCUN) and credit unions from that state have also reached out to support candidates in their own in-state House and Senate races, meeting with Minnesota State House Majority Leader Matt Dean (R), House Minority Leader Paul Thissen of the Democratic Farmer Labor (DFL) party, State Senate Majority Leader Dave Senjem (R), Senate Minority Leader Tom Bakk (DFL), and others to learn their positions on key credit union issues. MnCUN Political Advocacy Director Ryan Smith said the network continues to evaluate candidates for all statewide offices on their understanding of credit union issues and their ability to support credit unions and their mission to best serve members.

The North Carolina Credit Union League and credit unions in that state, including Mountain CU, Asheville, N.C., and Latino Community CU, Durham, N.C., have led in-branch voter registration drives ahead of this fall's elections. Pam Melton, NCCUL director of political affairs, assisted in the voting efforts at Mountain CU branches throughout western N.C., and said the registration events "were held as a way to show our members how important the upcoming elections are going to be. Credit Unions and their members must stay up to date and remain as a voice to be heard in local, state and national political campaigns," she added.

Early voting has already begun in some states, and CUNA has provided information for voters and an online tool to help them determine where they can apply for early voting applications, on For the CUNA elections website, use the resource link.

Ohio league highlights exam issues to lawmakers

 Permanent link
WASHINGTON (9/26/12)--The Ohio Credit Union League (OCUL) told lawmakers in a recent letter that it "has several issues" with a recent report by the National Credit Union Administration (NCUA)  Inspector General (IG) that critiqued both the agency's examination procedures as well as its process for hearing credit union complaints about examination issues.

The league criticized both the IG's study process, which it called "flawed,' as well as its findings.

In a study released earlier this month, the NCUA's Office of the Inspector General (OIG) found inconsistencies in how small credit union examination policies and procedures are implemented. However, according to the OIG report, the NCUA's recently released National Supervision Policy Manual addresses these and other examination concerns.

The OCUL letter, which was sent to Sens. Rob Portman (R-Ohio) and Sherrod Brown (D-Ohio), noted that the OIG study's methodology, and its conclusions, were both flawed. OCUL President Paul Mercer said the OIG should have consulted with credit unions as it prepared the study, and also took issue with conclusions regarding the NCUA's examinations, ombudsman and appeals process.

While the OIG report stated that the level of communication between NCUA examiners and credit unions was adequate, the OCUL said that credit unions have told the league they are still having issues.

"There must be strong and consistent communication between examiners and credit unions during the examination process," the letter said.

Credit unions also lack confidence in the NCUA's examination determination appeals process, the letter added. The OCUL suggested the NCUA could improve its appeals process by adopting an appeals process that includes a full review of the facts of each appeal case, and a final decision by an independent administrative law judge. The NCUA's ombudsman could also address examination appeal issues presented by credit unions, rather than focusing almost exclusively on complaints made by credit union members.

"A truly empowered ombudsman, focused particularly on the issue of retaliation, would go a long way toward strengthening the confidence of credit unions in the appeals process," the letter said.

Mercer added that the OIG report has strengthened OCUL support for the Examination Fairness and Reform Act (S. 2160), which would improve the exam process for financial institutions. S. 2160 and a similar House bill, H.R. 3461, would make information gathered by financial regulatory examiners available to financial institutions, codify certain examination policy guidance, and establish an exam appeals process that would allow financial institutions to air grievances before an independent administrative law judge. Both bills have been referred to their respective financial institution committees.

For the full letter, use the resource link.

CFPB and Mo. CUs meet ahead of CAB session

 Permanent link
WASHINGTON (9/26/12)--In preparation for Thursday's first ever meeting of its Consumer Advisory Board (CAB), the Consumer Financial Protection Bureau (CFPB) today will discuss mortgage disclosure form revisions, regulatory burdens and other issues with representatives from the Missouri Credit Union Association and local credit unions in a meeting in St. Louis, Mo.

Representatives from Anheuser Busch Employees CU, St. Louis, CU Community, Springfield, West Community CU, St. Louis, St. Louis Community CU, Mazuma CU, Kansas City, and others are expected at the meeting with CFPB Director Richard Cordray.

Other items on the roundtable meeting agenda include overdraft protection and payday lending. The credit union representatives also plan to address the speed with which new regulations are being promulgated, and the costs that the volume of new and existing regulations is creating for credit union members, credit unions and consumers.

The first meeting of the CAB is scheduled to take place on Sept. 27 and 28, and the panel is scheduled to meet at least twice a year. The 25-member panel, which will discuss, advise and consult with the bureau of emerging consumer financial issues, features two credit union representatives.

Those credit union reps are Bill Bynum, CEO of Hope Enterprise Corp. and Hope Community CU, Jackson, Miss., and Laura Castro de Cortes, vice president of alternative financial services for Centris FCU, Omaha, Neb.

Bynum was also named vice president of the CAB. (See Sept. 13 News Now story: CU reps among CFPB Consumer Advisory Board members)

Inside Washington (09/25/2012)

 Permanent link
  • WASHINGTON (9/26/12)--In the two enforcement actions it has issued, the Consumer Financial Protection Bureau (CFPB) has indicated it will pursue significant monetary penalties, a departure from previous actions (American Banker Sept. 25). Discover Financial Services late last week agreed to repay $200 million to cardholders who purchased card protection products by telephone from December 2007 to August 2011 (News Now Sept. 25). Discover also agreed to pay another combined $14 million in civil monetary penalties to the Federal Deposit Insurance Corp. and the CFPB. The Discover agreement follows a separate agreement between Capital One Financial and regulators, in which Capital One agreed to pay about $200 million in refunds. The bureau says wants to make it more expensive to break the law than to abide by it, CFPB Enforcement Director Kent Markus said on a conference call with reporters Monday …
  • WASHINGTON (9/26/12)--The Federal Deposit Insurance Corp. (FDIC) has revised its classification system for its bank examinations effective on or after Oct. 1. The change is intended to better communicate to institutions the severity of their violations and to provide more consistency in the classification of violations cited in "Reports of Examination." Under the new system, violations will be assigned to one of three levels, based primarily on the impact to consumers. Level 3 denotes a high-severity violation, one that could result in restitution to consumers in excess of $10,000 and pattern and practice violations of anti-discrimination laws. Level 2 are medium-severity violations and include violations resulting in potential restitution to consumers in an amount below the Level 3 threshold and other systemic or recurring violations. Low-severity violations, or Level 1, are those adequately addressed during the examination and that do not indicate weakness in the compliance management system and will not be included in the "Report of Examination." The FDIC communicated its new system to financial institutions in a Financial Institutions Letter (FIL-41-2012) …