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El Pasos FCU is ninth liquidation of 2012

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ALEXANDRIA, Va. (10/1/12)--El Paso's FCU, El Paso, Texas, became the ninth credit union to be liquidated in 2012 when the National Credit Union Administration (NCUA) last week determined the credit union had no prospect to restore operations.

El Paso's FCU held approximately $5 million in assets from 1,035 members when it was liquidated, the NCUA said. The credit union, which was originally chartered as El Paso Smelter FCU in 1952, served employees of American Smelting and Refining Company, select employee groups, and other affinity groups.

Member deposits at the credit union are insured up to $250,000 by the National Credit Union Share Insurance Fund, and the NCUA said its Asset Management and Assistance Center will transfer some share accounts to El Paso Area Teachers FCU, El Paso, Texas.

For the full NCUA release, use the resource link.

FHFA OIG urges greater oversight of GSEs

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WASHINGTON (10/1/12)--The Federal Housing Finance Agency (FHFA) has held government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac under government conservatorship since 2008, and the FHFA's oversight of them would be improved by tighter control of their individual business decisions, the FHFA's Office of the Inspector General (OIG) said in a report.

The OIG report noted that the FHFA requires the GSEs to obtain approval for decisions involving legal settlements over $50 million, risk limit increases and other business decisions. However, the OIG found, the FHFA does not review and approve Fannie Mae's single-family underwriting standards or its High Touch Servicing Program, which, according to the OIG release, involved multiple transfers of mortgage servicing rights for more than 700,000 loans with an unpaid principal balance in excess of $130 billion.

"As conservator, FHFA has a responsibility to ensure that the [GSEs'] underwriting standards appropriately balance credit risk and return. FHFA can further fulfill its conservator responsibility by ensuring sound oversight of underwriting standards through more active involvement and detailed guidance governing its review process," the OIG said.

The report also recommended the FHFA ensure that significant GSE business decisions are sent to the conservator for approval and encouraged the FHFA to properly analyze, document, and support the decisions it makes as conservator. The agency should also work to confirm that the GSEs have complied with FHFA instructions.

The GSEs agreed with most of the OIG recommendations. For the full OIG report, use the resource link.

Inside Washington (09/28/2012)

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  • WASHINGTON (10/1/12)--Treasury Secretary Timothy Geithner Thursday sent a letter to the members of the Financial Stability Oversight Council calling for reform of the money market fund (MMF) industry. "Further reforms to the MMF industry are essential for financial stability," Geithner wrote. "MMFs are a significant source of short-term funding for businesses, financial institutions, and governments. The funds provide an important cash-management vehicle for both institutional and retail investors. However, the financial crisis of 2007–2008 demonstrated that MMFs are susceptible to runs and can be a source of financial instability with serious implications for broader financial markets and the economy." Last month, the Securities and Exchange Commission (SEC) announced that it would not proceed with a vote to solicit public comment on potential structural reforms of MMFs. The SEC took steps in 2010 to strengthen the liquidity, credit-quality, maturity and disclosure requirements of the funds. However, Geithner said the reforms did not address two characteristics of MMFs that leave them susceptible to destabilizing runs: the lack of explicit loss-absorption capacity in the event of a drop in the value of a portfolio security; and the "first-mover advantage" that provides an incentive for investors to redeem their shares at the first indication of any perceived threat to the fund's value or liquidity …
  • WASHINGTON (10/1/12)--In a letter to financial regulators, a bipartisan group of 53 senators stressed that proposed Basel III capital rules are too complex and expensive for community banks to comply with and will hurt the banks' ability to lend to borrowers. "Community banks have little or no access to capital markets," the group wrote. "In most cases, they must rely on the bank's officers, directors and shareholders to raise additional capital. Raising capital for community banks in the best of times is challenging and nearly impossible in times of economic stress." In June, the Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency released proposals that would implement Basel III in the U.S. Basel III standards will require banks to hold common equity of 4.5% by 2015. In addition, banks must hold a 2.5% conservation buffer, which will be gradually introduced by 2019, and increase Tier 1 levels from 4% to 6% by 2015 (News Now Aug. 14). The international bank rules are intended to force banks to hold more capital as a buffer against future financial shocks …
  • WASHINGTON (10/1/12)--The overall quality of first-lien mortgages serviced by large national and federal savings banks improved from the same period a year ago, but showed seasonal decline from the prior quarter, according to a report released Thursday by the Office of the Comptroller of the Currency (OCC). The percentage of mortgages that were current and performing at the end of the quarter was 88.7%, compared with 88.9% the prior quarter and 88.1 % a year earlier, according to the OCC Mortgage Metrics Report for the Second Quarter of 2012.  The percentage of mortgages that were 30 to 59 days past due was 2.8%, up 12.1% from the prior quarter but down 7.5% from a year ago. Seriously delinquent mortgages--60 or more days past due or held by bankrupt borrowers whose payments are 30 or more days past due--fell to their lowest level in three years. The percentage of mortgages that were seriously delinquent was 4.4%, down 0.8% from the prior quarter and 9.2% from a year earlier. Several factors contributed to the year-over-year improvement, including strengthening economic conditions, servicing transfers, and the ongoing effects of both home-retention loan-modification programs, as well as home forfeiture actions, the OCC said …
  • WASHINGTON (10/1/12)--The Federal Reserve on Friday began the quarterly publication of transaction-level information related to discount-window lending to depository institutions and open market transactions.  The data in the initial release cover transactions between July 22, 2010, and Sept. 30, 2010. The transaction-level detail supplements the extensive aggregate information the Federal Reserve has previously provided in weekly, monthly and quarterly reports. Data on discount window loans include the name of the borrowing institution, the amount borrowed, the interest rate charged and information about collateral pledged. Data on open market transactions include temporary and permanent purchases and sales of Treasury and agency securities, securities lending activities, and foreign exchange transactions and foreign currency reserve investments.  Information on each transaction includes the identity of the counterparty, the security or currency purchased or sold, and the date, amount and price of the transaction  …
  • ALEXANDRIA, Va. (10/1/12)--Credit union staff and volunteers still have time to register for the online town hall with National Credit Union Administration (NCUA) Board Chairman Debbie Matz Thursday at 3 p.m. ET. Registration for this free NCUA webinar is available online. Participants also will use this link to log into the webinar after registration. Registrants should allow pop-ups from this website
  • ALEXANDRIA, Va. (10/1/12)--Speaking at the Combined Council of America's Credit Unions' (CCACU) 31st Annual Conference last week, National Credit Union Administration (NCUA) Board Member Michael Fryzel encouraged credit unions to "understand what credit union members want and then make sure they get it in the least-cost, highest-quality manner possible. For 80 years credit unions have done this, and done this well," he said, but credit unions will need to do "as well or better" in the years ahead. CCACU credit unions are tied to the U.S. automobile industry, and Fryzel said while the automobile industry has had its share of issues, CCACU credit unions "have been unwavering in their service." …

Consumers paying more post-interchange EPC study

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WASHINGTON (10/1/12)--Debit interchange fee cap legislation was promoted by retailers as consumer-friendly policy before it was enacted last year, but consumers actually have paid an average of 1.5% more for certain goods since the interchange fee cap implementation, an Electronic Payments Coalition (EPC) study has found.

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The Federal Reserve Board's final rule implementing the interchange law capped large issuer debit interchange fees at 21 cents. An additional five basis points per transaction may be charged to cover fraud losses, and an extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards. Most credit unions are exempt from the fee cap.

To gather data on the interchange cap's impact on consumers, EPC researchers made 36 shopping trips to 18 stores across the county, purchasing a consistent list of products at each store. One round of purchases was made in September 2011, just before the interchange cap took effect, and another round was made late last month.

Overall, the EPC found that 67% of retailers visited either increased their prices or kept them the same. Specifically, the EPC found that after the interchange cap implementation, shoppers paid on average:

  • Eighty cents, or 5.4%, more for the same items at a Walmart in Portland, Maine;
  • One dollar, or 2.6%, more for the same items at a 7-Eleven in Washington, D.C.;
  • Thirty cents, or 2.9%, more for the same items at a Walgreens in Boston; and
  • $2.22, or 6.6%, more for the same items at Home Depot in Atlanta.
The EPC noted that these increased prices come as retailers save billions and debit card issuers are forced to make up for lost revenue. "With a wink and a nod, giant retailers promised to lower prices for their customers if Congress passed [interchange legislation]. One year after implementation, retailers have taken home $8 billion while many of their customers pay more at the register," EPC spokeswoman Trish Wexler added. The EPC study was covered in Washington political paper Politico's Morning Money column.

Credit unions and community banks also are being harmed by the interchange regulations, the Credit Union National Association and other finance industry partners said in a recent letter to Congress.

The letter noted that a U.S. Government Accountability Office (GAO) study released last month--which found smaller community banks and credit unions, supposedly "exempted" from the fallout of this legislation-- have instead seen interchange revenue decreases of 5% in the first three months following interchange fee cap implementation.

The letter also noted that credit unions and community banks are struggling to maintain viable debit programs, and have had to raise their fees in some cases. "The GAO further concludes that even more harm to community banks and credit unions is likely as the marketplace evolves," the letter added. (See Sept. 24 News Now story: Interchange cap not helping consumers: CUNA, trades)

For the EPC study, use the resource link.

CUNA opposes NCUA liquidity proposal

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WASHINGTON (10/1/12)--While it is important for credit unions to address key operational issues, such as sources of emergency liquidity, the Credit Union National Association (CUNA)  urged the National Credit Union Administration (NCUA) not to proceed with a plan that would require credit unions with less than $10 million in assets to maintain basic written emergency liquidity policies.

The NCUA proposal, which CUNA opposes, would also require federally insured credit unions (FICUs) with assets of $10 million or more to develop contingency funding plans describing how their credit union would address liquidity shortfalls in emergency situations. FICUs with assets of $100 million or more would be required to have access to a backup federal liquidity source for emergency situations. This backup liquidity could come from NCUA Central Liquidity Fund (CLF) membership or direct borrowing from the Federal Reserve's Discount Window.

"Although overall liquidity management and policies are vital to credit union operations, there is no need for credit unions to secure access to specific types of emergency liquidity beyond what other federally insured depository institutions are required to do," CUNA Deputy General Counsel Mary Dunn wrote in a comment letter.

"Credit unions are already inundated with too many rules and any additional regulatory requirements should be imposed only if there is clear and convincing evidence that they are needed from a material safety and soundness standpoint or to meet statutory requirements," Dunn added. "In our view, the agency has not provided sufficient rationale or justification for issuing a new regulation."

Dunn noted that interagency guidance on liquidity policies, plans, and procedures, released in 2010, "sufficiently addresses primary issues regarding liquidity risk management" and said that other agencies "have not found the need to issue regulations on emergency liquidity."

New NCUA liquidity regulations "would be redundant in terms of safety and soundness results, while imposing significant and unnecessary compliance costs on credit unions. Moreover, NCUA and state examiners already have sufficient authority to direct credit unions to address any material deficiencies in their liquidity risk management policies and implementation," Dunn said.

If the NCUA does move forward with the liquidity proposal, the CUNA comment letter suggested the agency change the proposal to:

  • Ensure the definition of smaller credit unions dovetails with the NCUA's revised definition of "small entity," which is now under review;
  • Use, for larger credit unions, indicators such as loan-to-share ratios--and not just asset size only--in determining whether additional liquidity policy and federal liquidity source requirements should be imposed; and
  • Allow, under certain conditions, Federal Home Loan Banks (FHLBs) to be permissible sources of emergency liquidity.
In other comments, Dunn wrote that the agency should refrain from imposing Basel III liquidity measures and monitoring tools, or similar measures, on credit unions with assets of $500 million or more. "The Basel III requirements have raised questions from banks and regulators alike and were not developed with any consideration of the unique nature, structure or characteristics of credit unions," Dunn wrote.

She also noted concern among credit unions that, with the demise of U.S. Central Bridge Corporate FCU, the CLF must be modified, for example, to address the requirement for stock subscriptions and to facilitate the ability of credit unions to use the CLF as readily as institutions are able to utilize the Federal Reserve's Discount Window for liquidity purposes.

For the full CUNA comment letter, use the resource link.

NCUA doc covers 2012 CU trends

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ALEXANDRIA, Va. (9/28/12)--Details on credit union membership, assets, net worth, earnings and other industry metrics for the first half of 2012 are summarized in the National Credit Union Adminisration's (NCUA) compilation of credit union financial trends.

The NCUA documents notes that, in the first half of 2012:

  • The number of federally insured credit unions dropped by 133;
  • The number of current credit union members grew by 1,317,199, to total 93.1 million;
  • Credit union assets increased $45.95 billion;
  • Credit union net worth dollars increased by $4.15 billion, to total $102.41 billion; and
  • Shares increased by $41.39 billion, with strong growth in regular shares, share drafts and money market shares.
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The NCUA credit union trend document reflects data that was reported in the NCUA's second quarter call report document, which was released on Aug. 31. The credit union industry's overall performance grew stronger in almost every category during the second quarter of 2012, as charge-offs, bankruptcy filings and loan loss reserves also declined.

The first-half credit union data is broken down into chart form in this latest NCUA release.

For the full NCUA release, use the resource link.

CFPB offers remittance guidance webinar

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WASHINGTON (9/28/12)--The Consumer Financial Protection Bureau (CFPB) has announced an Oct. 16 webinar and new guidance to help credit unions and other financial institutions prepare for pending remittance transfer regulations.

The CFPB's new remittance rule, which is scheduled to take effect on Feb. 7, will require remittance transfer providers to disclose the exchange rate, all fees associated with a transfer, and the amount of money that will be received on the other end. Remittance transfer providers also will  be required to investigate disputes and correct errors. The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year.

The agency this week published a safe harbor list of countries that qualify for an exception in the remittance rule. Remittance providers in these countries are allowed to file estimates of certain figures in lieu of disclosing exact amounts, as local law does not permit financial institutions to disclose the exact amounts of transactions.

The October remittance webinar will give participants an overview of the rule. Credit unions, money transmitters, banks and other companies that send money abroad for consumers, as well as other organizations that work with or represent consumers who send money abroad, can have their compliance questions answered, the CFPB said. Participants may send their questions to the CFPB until Oct. 5, and must register for the webinar by Oct. 9, the CFPB said.

The CFPB said it is also planning to release a small-business compliance guide to the remittance rule soon.

The Credit Union National Association (CUNA) continues to urge the CFPB to consider ways to lessen the impact of the final international remittance transfer rule on credit unions, and has asked the agency to increase the safe harbor exemption beyond 100 transfers.

CUNA President/CEO Bill Cheney, General Counsel Eric Richard and Deputy General Counsel Mary Dunn met with CFPB Director Richard Cordray on the remittance issue earlier this month. Cheney urged Cordray to distinguish in the agency's rulemaking between credit unions that champion consumers' interests and other service providers in the financial marketplace. Cheney and Cordray also discussed foreign tax disclosures and liability issues related to the remittance transfer regulations during that meeting.

For more on the CFPB guidance and the webinar, use the resource link.

Low mortgage rates can be help hindrance for CUs CUNA

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WASHINGTON (9/28/12)--Record low mortgage rates, like those reported this week, "are something of a double-edged sword for credit unions," Credit Union National Association (CUNA) Chief Economist Bill Hampel said Thursday.

"On the one hand, the resulting refinancing boom will generate significant income. Also, the stronger the recovery in the housing market, the better the outlook for moderation in future National Credit Union Administration (NCUA) corporate stabilization assessments. On the other hand, higher-rate mortgages in credit union portfolios are being prepaid, and replacing those mortgages with new mortgages at these very low interest rates is perilous," he said.

Five-year adjustable-rate mortgages (ARMs) were the only mortgage products not to set records for the week ended Sept. 27. Freddie Mac reported that all-time low average rates for 30- and 15-year fixed-rate mortgages and one-year ARMs "helped keep homebuyer affordability high and refinancing strong to support an already improving housing market."

Thirty-year fixed-rate mortgages averaged 3.40% this week, 3.49% last week and 4.01% this time last year. Fifteen-year fixed-rate mortgages averaged 2.73% this week, 2.77% last week and 3.28% this time last year.

Freddie Mac Vice President and Chief Economist Frank Nothaft said the fixed-rate decreases were largely due to the Federal Reserve's purchases of mortgage securities and should support an already improving housing market.

Five-year ARMs averaged 2.71% this week, compared with 2.76% the previous week and 3.02% the same week last year.

The average one-year ARM was 2.60%, down slightly from the 2.61% average reported last week. One-year ARMs averaged 2.83% this week last year.

Sales of existing homes continued to improve last month, as the national median price rose on a year-over-year basis for the sixth consecutive month. According to the National Association of Realtors (NAR), total existing-home sales--which are completed transactions that include single-family homes, townhomes, condominiums and co-ops--rose 7.8% to a seasonally adjusted annual rate of 4.82 million in August.

The August 2012 number is 9.3% higher than the 4.41 million-unit level reported in August 2011. New housing starts also increased last month, reaching the highest level seen in two years, the U.S. Department of Commerce reported.

These signs of recovery in the housing market bode well for credit unions and the economy in general, and indicate that consumers are generally more confident and willing to spend, CUNA senior economist Mike Schenk said last month.

Inside Washington (09/27/2012)

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  • WASHINGTON (9/28/12)--Nine Minnesota credit union representatives were in Washington,
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    D.C., Sept. 19-21 for the Minnesota Credit Union Network's annual Hike the Hill event. During meetings with the state's congressional delegation, the group focused on the pending member business lending (MBL) vote in Congress. They urged legislators to support the Small Business Lending Enhancement Act. Credit unions and the Credit Union National Association (CUNA) are urging Congress to increase the MBL cap to 27.5% of assets from 12.25%. Doing this would help the economy by injecting $13 billion for new small-business loans and would help generate 140,000 new jobs the first year. Doing so would not cost taxpayers, CUNA said. The Minnesota group also discussed the necessity of passing legislation eliminating the need for physical fee disclosures on ATMs, and the difficulty in conducting credit union operations in today's stringent regulatory environment. Attendees also visited National Credit Union Administration headquarters to meet with Chairman Deborah Matz and board member Michael Fryzel, pictured at the center of the photo. (Photo provided by the Minnesota Credit Union Network) …

Inside Washington (09/26/2012)

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  • WASHINGTON (9/27/12)--The Federal Deposit Insurance Corp. (FDIC) Wednesday announced the appointment of John Vogel as regional director in New York. Vogel had been serving there as deputy regional director for risk management. In his new position, he directs the supervision of about 890 FDIC-insured depository institutions with combined assets of more than $1.5 trillion. The New York Region covers Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, Pennsylvania, New Jersey, Delaware, Maryland, Washington, D.C., Puerto Rico and the U.S. Virgin Islands. Vogel began his FDIC career in 1990 working at the Concord, N.H., field office. Since then he has served as a bank examiner and supervisory examiner in offices throughout New England. From 2004 through 2006, he was the special assistant to FDIC board member Thomas J. Curry in Washington, D.C., and then returned to New England as the field supervisor for the Southern New England Field territory. In August 2009, Vogel became an assistant regional director in New York, and then served as deputy regional director for risk management …
  • WASHINGTON (9/27/12)--The overall positive return on Troubled Asset Relief Program (TARP) bank programs now totals more than $21 billion after Zions Bancorporation, Salt Lake City, repurchased its remaining $700 million in outstanding TARP Capital Purchase Program (CPP) preferred stock, the Treasury Department said Wednesday. Treasury invested $245 billion through TARP's bank programs and has now recovered more than $266 billion through repayments, dividends, interest and other income. Treasury originally invested $1.4 billion in Zions through the CPP. Prior to the $700 million repurchase, Zions had repurchased an additional $700 million in CPP preferred stock in March. In addition to the $1.4 billion in repayments, Zions Bancorporation also paid taxpayers $253 million in dividends over the life of its TARP investment, Treasury said …

Free training for CDFIs that support mid-size biz

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WASHINGTON (9/27/12)--Community Development Financial Institutions (CDFIs) that lend to small- and medium-sized-businesses can receive free training through an upcoming CDFI Fund Capacity Building Initiative training series, entitled Innovations in Small Business Lending.

The training events, which will be provided by Deloitte Financial Advisory Services LLP, will help CDFIs grow their business lending capabilities. The first training event has been scheduled for Nov. 13 and 14, at the Minneapolis Federal Reserve in Minneapolis, Minn. Additional training events are scheduled to be held between November 2012 and May 2013, and those events will be announced as they are finalized.

The free training events will help CDFIs better tailor their lending practices and analyze multiple national and local lending trends, the CDFI Fund release said. Deloitte trainers will also help CDFIs evaluate the potential economic and social impact of their business lending, and perform preliminary financial calculations, the release added.

CDFI Fund Director Donna Gambrell said the training events will expand the Capacity Building Initiative's efforts to provide cutting edge training, technical assistance, and impact analysis to CDFIs that work to support small and medium enterprises in underserved communities throughout the United States, and will "help CDFIs enhance and expand business lending, ultimately putting more Americans back to work."

The Credit Union National Association (CUNA) continues to fight to increase the member business lending cap for credit unions by supporting two bills that would increase the cap from 12.25% of assets to 27.5% of assets. CUNA expects the Senate version of MBL legislation, S. 2231, the Small Business Lending Enhancement Act, to receive a vote once the U.S. Congress returns to Washington in November.

CUNA has estimated that an MBL cap increase would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment. Both benefits would come at no cost to taxpayers.

For more on the CDFI Fund training, use the resource link.

Five-year plan unveiled by CFPB

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WASHINGTON (9/27/12)--The Consumer Financial Protection Bureau (CFPB) on Wednesday released its draft strategic plan for 2013 through 2018, and credit unions and other interested parties can suggest improvements to the plan and comment on how that plan could impact the consumer finance market until Oct. 25.

In the proposed plan, the CFPB noted its stated goals of promoting a marketplace where:

  • Customers can see prices and risks up front and easily make product comparisons; and
  • No one can build a business model around unfair, deceptive, or abusive practices.


To reach these goals, the CFPB proposal sets out 11 desired outcomes, 25 strategies that will help the CFPB achieve these outcomes, and 27 performance measures that the agency will use to track its progress.

Helping consumers more fully understand the risks associated with some financial products and improving financial literacy are also key goals going forward, the CFPB added.

The agency said it will, in part, determine its success by keeping track of the percentage of scheduled regulatory projects it completes, the percentage of five-year regulation reviews that are completed on schedule, and the percentage of rulemakings that are informed by public outreach processes, such as Small Business Regulatory Enforcement Fairness Act (SBREFA) panels and/or e-rulemaking.

Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said CUNA is reviewing the plan and will certainly be commenting. "We want the CFPB to include efforts to protect credit unions from needless regulatory burdens in its strategic plan," she said.

For the full CFPB release, use the resource link.

FASB must exclude CUs from risk reporting changes CUNA

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WASHINGTON (9/27/12)--Noting that credit unions are not publicly traded companies, and should not be treated as such, the Credit Union National Association (CUNA) has urged the Financial Accounting Standards Board (FASB) to exclude credit unions from the scope of upcoming accounting standards changes.

FASB's proposed requirements would unduly burden credit unions, while at the same time not resulting in superior information to a credit union's members, creditors, auditors, or regulators, CUNA said in a comment letter.

FASB this summer released a draft proposal that would amend its financial instruments regulations by requiring credit unions and other financial institutions to provide certain disclosures about liquidity risk and interest rate risk (IRR). The proposal is intended to provide users of financial statements with more decision-useful information about entity-level exposures to liquidity risk and IRR.

Specifically, credit unions and other institutions would be required to disclose liquidity risk information that includes:
  • The carrying amounts of classes of financial assets and liabilities in a table, segregated by expected maturities, including off-balance sheet financial commitments and obligations;
  • Information about time deposit liability, including the cost of funding in a table or list during the previous four fiscal quarters; and
  • Details on available liquid funds, such as unencumbered cash, high-quality liquid assets and borrowing availability, in a tabular format.
Financial institutions would also be required to provide IRR disclosures that include:

  • The carrying amounts of classes of financial assets and liabilities according to time intervals based on the contractual repricing of the instrument;
  • An interest rate sensitive table that presents the effects on net income and shareholders' equity of hypothetical instantaneous shifts of interest rate curves; and
  • Information on the organization's overall IRR exposure.
CUNA Deputy General Counsel Mary Dunn in a comment letter to FASB said while CUNA supports appropriate transparency on the part of credit unions to their members, regulators, and Congress, the National Credit Union Administration (NCUA) has regulated IRR for federally insured credit unions. The new disclosure requirements imposed by FASB could undermine compliance with those NCUA requirements, particularly if members are confused about the information provided to them under the FASB proposal, Dunn said.

Dunn in the letter also noted the differences between credit unions, which are beholden to their members, not shareholders who have purchased publicly traded stock. "As such, these disclosures are not appropriate for credit unions," she said.

Credit unions would have to undertake significant compliance costs to provide these FASB disclosures, and the costs of compliance would likely far outweigh any benefits from this proposal, the CUNA letter added. The letter noted that FASB's proposal also comes at a time when credit unions are facing an avalanche of new requirements as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act and other requirements.

Further, liquidity risk and IRR risk information is not frequently demanded by credit union members, CUNA noted. A CUNA CFO council survey found that credit union members, in general do not request financial statements, IRR details or liquidity risk details from their credit unions. Sixty-seven percent of the 127 credit unions surveyed said none of their members had asked for financial statements within the past year. The 31% of credit unions that had received financial information requests only received those requests from between one and five of their members, and a scant few of those credit unions were asked for detailed IRR or liquidity risk information.

If FASB does not agree to remove credit unions from the scope of the proposal, FASB should allow adequate time for all reporting entities to make the necessary changes to their systems and retrain staff. CUNA suggested FASB set an effective date at least one year beyond the issuance of the final rule, and grant credit unions and other nonpublic entities an extra six months to comply.

For the full CUNA comment letter, use the resource link.

NACHA technical changes supported by CUNA

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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

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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 cuna.org/election. For the CUNA elections website, use the resource link.

Ohio league highlights exam issues to lawmakers

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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

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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)

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  • 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) …

Oct. 5 due diligence discussion set by FinCEN

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WASHINGTON (9/25/12)--Proposed regulations that would require financial institutions and others to establish and maintain member and customer account monitoring policies will be the subject of an Oct. 5 roundtable discussion, the Financial Crimes Enforcement Network (FinCEN) has announced.

The roundtable discussion on customer due diligence (CDD) will take place at the Financial Industry Regulatory Authority (FINRA) in New York, N.Y., and will be held between the hours of 10 a.m. and 3 p.m. ET. Advanced registration is required, and interested parties must register by Sept. 28. Any interested parties, including finance industry representatives, may attend, FinCEN said.

Discussion will focus on FinCEN's March Advanced Notice of Proposed Rulemaking that would codify, clarify, consolidate and strengthen CDD rules. The proposal, which would apply to financial institutions, securities brokers and dealers, mutual fund brokers and dealers, futures commission merchants, and some introducing commodities brokers, addresses standards for verifying the identity of each member/customer and understanding the "nature and purpose" of each account held at an institution to assess the likelihood of suspicious activity.

The FinCEN plan, if made final, would be one part of a broader U.S. Treasury strategy to enhance financial transparency in order to strengthen efforts to combat financial crime, including money laundering, terrorist financing, and tax evasion.

FinCEN said the meeting will focus, in part, on how and when financial institutions collect "beneficial ownership" information from their customers and members and how this information is verified. FinCEN is also interested in any costs associated with obtaining this information. Roundtable attendees will also have the chance to discuss how they conduct due diligence on trust accounts, and how financial institutions identify whether their customers are or are not "shell companies."

The Credit Union National Association (CUNA) has noted that while it supports the objectives of the FinCEN proposal, the burdens and costs credit unions could face as a result would far outweigh the purported benefits to FinCEN. CUNA has suggested that FinCEN abandon the due diligence proposal and, alternatively, work with the National Credit Union Administration and other federal financial regulators to further clarify current Bank Secrecy Act and anti-money laundering rules.

The information needed to review these accounts can also be difficult to obtain, and credit unions may need to increase their staff and make costly software changes to comply with the requirements, CUNA added.

For more on the FinCEN meeting, use the resource link.

Agencies detail practices that brought Discovers fines

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WASHINGTON (9/25/12)--The deceptive telemarketing tactics that Discover Bank employees used to sell payment protection plans and other credit card add-on products, and resulted in a joint Federal Deposit Insurance Corp. (FDIC)/Consumer Financial Protection Bureau (CFPB) action against that financial institution, were detailed in a Monday release.

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.

Discover also agreed to pay another combined $14 million in civil monetary penalties to the FDIC and the CFPB, and to enhance the company's marketing practices. Affected consumers will not need to take any action to receive their refunds. They will receive checks or will have the money they are owed credited to their Discover card account, the agencies said.

The FDIC and CFPB in a release said the fines follow a joint investigation which found that Discover mislead consumers into paying for various credit card "add-on products," including payment protection, credit score tracking, identity theft protection, and wallet protection. According to the agencies, telemarketers promoting these products may have deceived consumers about whether they were actually purchasing these products, and sped up their speech during portions of consumer marketing calls that disclosed the prices and terms of these products.

According to the FDIC and CFPB, the products in question were:

  • Payment Protection, which was marketed as a product that allows consumers to put their payments on hold for up to two years in the event of unemployment, hospitalization, or other qualifying life events;
  • A Credit Score Tracker, which is designed to allow a customer unlimited access to his or her credit reports and credit score;
  • Identity Theft Protection, which was marketed as providing daily credit monitoring; and
  • A Wallet Protection product was sold as a service to help a consumer cancel credit cards in the event that his or her wallet is stolen.
Many cardholders were led to believe some products were free, when, in fact, they were paying for them. The telemarketing scripts frequently suggested that consumers would not be charged for the products until after having a chance to review printed materials from Discover.  Discover, however, did not provide consumers with the information until after Discover had already initiated the consumer's purchase of a product.

Consumer were also at times enrolled in these protection programs, and charged for the products, without their consent. Elements of the payment protection benefits, such as exclusions for pre-existing medical conditions and certain limitations concerning employment, were also not disclosed to consumers, the agencies said.

The Discover agreement follows by just a couple months a separate agreement between Capital One Financial and regulators, which revolved around that company's call center allegedly leading customers to pay too much for credit card products. Capitol One also agreed to pay about $200 million in refunds.

For more on the Discover agreement, use the resource link.

CUNA meets with CFPB on remittance rule changes

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WASHINGTON (9/25/12)--Credit Union National Association (CUNA) President/CEO Bill Cheney urged Consumer Financial Protection Bureau (CFPB) Director Richard Cordray to distinguish in the agency's rulemaking between credit unions that champion consumers' interests and other service providers in the financial marketplace in a meeting with the director.

Cheney also urged the agency to continue considering ways to lessen the impact of the final international remittance transfer rule on credit unions, and addressed other credit union priorities during the meeting last week.

Under the CFPB remittance rule, remittance transfer providers would be required to disclose the exchange rate, all fees associated with a transfer, and the amount of money that will be received on the other end. Remittance transfer providers will also be required to investigate disputes and correct errors. The bureau's new remittance disclosure rule will take effect Feb. 7.

The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year. The agency has claimed at least 80% of credit unions that offer remittance services would be exempt under this safe harbor, but CUNA during the meeting last week revealed recent research showing that a number of credit unions they surveyed make more than 100 remittance transfers per year.

CUNA staff and the CFPB during the meeting also discussed foreign tax disclosures and liability issues related to the remittance transfer regulations.

Mortgage regulation changes, including the CFPB's revisions of the qualified mortgage definition, were also discussed during the meeting. Under a still-developing CFPB rule, mortgage originators would be required to consider a homebuyer's ability to repay a loan before the loan is offered. The CFPB's ability-to-repay requirements would apply to consumer credit transactions that are secured by a dwelling and be further defined by the agency's definition of a qualified mortgage.

CUNA called on the CFPB to broadly define qualified mortgages and provide mortgage lenders with a legal safe harbor from ability-to-repay litigation.

Mortgage servicing, mortgage loan officer compensation and the definition of "finance charge" under the proposal accompanying the CFPB's still-under-development combined Truth in Lending Act (TILA)/Real Estate Settlement Procedures Act (RESPA) forms were also discussed during the meeting.

CUNA General Counsel Eric Richard and Deputy General Counsel Mary Dunn participated in the meeting.

In other CFPB news, Zixta Martinez, CFPB assistant director for community affairs, and Bart Shapiro, senior advisor for small business, also met recently with the CUNA Council Forum. CUNA's Council Forum also met with National Credit Union Administration senior staff Buddy Gill, Owen Cole, and Tim Segerson last week.

NCUAs Marquis to retire at yearend

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ALEXANDRIA, Va. (9/25/12)--Calling retiring National Credit Union Administration (NCUA) Executive Director David Marquis a fixture at the agency, Credit Union National Association (CUNA) President/CEO Bill Cheney said Marquis has helped define the culture there, having been involved in so many of the operational issues at NCUA during his 34 years of service.

Click to view larger imageWest Virginia Credit Union League President/CEO Ken Watts (left) and NCUA Executive Director David Marquis (right) chat before presenting differing views during a House subcommittee hearing in February on a bill intended to reform the federal financial institution examination process. (CUNA Photo)
Cheney further noted Marquis' significant role in NCUA's handling of corporate credit unions during a critical juncture, and said CUNA looks forward to working with new NCUA leadership.

The NCUA Monday announced that Marquis plans to retire at the end of the year, after filling many roles at the agency.

Since January 2009, Marquis' job at the agency has been to oversee its day-to-day as executive director. For the 14 years before that, he served as director of the Office of Examination and Insurance, where he was responsible for the safe and sound operation of the National Credit Union Share Insurance Fund (NCUSIF) and for monitoring the examination and supervision procedures at all federally insured credit unions.

Also during his 34 years at the agency, Marquis has served as a supervisory examiner, regional manager, associate regional director, regional director, and deputy director of the Office of Examination and Insurance. Marquis began his career with NCUA as an examiner in Baltimore.

"It is difficult to imagine this agency without Dave," NCUA Chairman Debbie Matz said, announcing Marquis' decision to leave in December. "Over the course of his career, Dave initiated many of the changes that enabled NCUA to protect the safety and soundness of the increasingly sophisticated credit union industry. Dave's foresight and diligence transformed NCUA's exam process to ensure that examiners have the requisite expertise, tools and training, and that exams are thorough and effective."

Since starting his career at NCUA in 1978, the credit union industry's total assets grew 1,860%, the NCUA release noted, from $51.4 billion to more than $1 trillion. Matz said Marquis' "calm and steady leadership" during the economic downturn brought him "the admiration, trust and respect of the entire agency."

NCUA board member Gigi Hyland said Marquis "cares profoundly about the health, safety and soundness of the institutions he has supervised," and noted that her policy debates with Marquis resulted in policy and regulations that appropriately protected credit unions and the NCUSIF during the recent recession.

Board member Michael Fryzel said Marquis "has done an outstanding job in every position held," and wished him "all the best in everything he goes on to do."

The NCUA said it will select the next executive director later this year.

Fake employees attempt ID theft FinCEN warns

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WASHINGTON (9/25/12)--The Financial Crimes Enforcement Network (FinCEN) has issued an alert warning of telephone and e-mail scams in which the fraudster claims to be an employee of FinCEN, and seeks personal information from the call or email recipient.

In one example, the false FinCEN employee calls and identifies an outstanding debt. The debt may be real, or made up, FinCEN said. The caller, who often knows the victim's social security number, account number or other personal information, then demands that the victim pay the debt immediately.

In another example, individuals claiming to represent the U.S. Treasury or FinCEN inform victims that they have received large grants from the Treasury, and must provide bank account information and make a payment or donation to receive the grant funds.

FinCEN said it does not make unsolicited public information requests. The agency recommended that recipients of these calls, letters or e-mails ignore any attempts at contact, and avoid sending money or providing personal or confidential information. Potential scam victims should contact local, state, or federal authorities, FinCEN added.

For the full FinCEN release, use the resource link.

Inside Washington (09/24/2012)

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  • WASHINGTON (9/25/12)--A task force formed by President Barack Obama to investigate illicit mortgage practices that contributed to the financial crisis will soon take legal action, New York Attorney General Eric Schneiderman said Thursday. Schneiderman, a co-chair of the Residential Mortgage-Backed Securities Working Group, said his office would take action and he expected his federal counterparts on the task force to do the same (American Banker Sept. 25). The task force was formed in January to probe the pooling and sale of risky mortgages in the runup to the 2008 financial crisis. It includes the Justice Department, the Securities and Exchange Commission, the Department of Housing and Urban Development and the Internal Revenue Service …
  • WASHINGTON (9/25/12)--The House Ethics Committee is expected Friday to clear Rep. Maxine Waters (D-Calif.) of ethics violations, paving the way for her to serve as the chief Democrat on the House Financial Services Committee next year. Waters faced accusations of improperly helping minority-owned OneUnited Bank secure Troubled Asset Relief Program funds, even though her husband had a financial interest in the bank (American Banker Sept. 25). Politico later published a story that questioned whether the panel's investigation had been compromised. The committee's former staff director alleged that two committee lawyers secretly communicated with Republican members of the panel. A final vote was expected as early as Monday. Waters would succeed retiring Rep. Barney Frank (D-Mass.) as the lead Democrat on the committee …
  • WASHINGTON (9/25/12)--Republican presidential candidate Mitt Romney and running mate Paul Ryan unveiled a seven-page white paper on Friday laying out their plans to improve the U.S. housing market. The Romney-Ryan plan said it will completely end "too-big-to-fail" by reforming Fannie Mae and Freddie Mac. However, the plan does not provide details on how the government-sponsored enterprises would be wound down. "A Romney-Ryan Administration will protect taxpayers from additional risk in the future by reforming Fannie Mae and Freddie Mac and provide a long-term, sustainable solution for the future of housing finance reform in our country," the paper said. The paper also discusses "responsibly" selling 200,000 government-owned homes, getting rid of Dodd-Frank, improving the job market, and making foreclosures easier …
  • WASHINGTON (9/25/12)--Federal banking regulatory agencies on Monday announced the availability of a regulatory capital estimation tool to help community banking organizations and other interested parties evaluate recently published regulatory capital proposals. The tool will assist the organizations in estimating the potential effects on their capital ratios of the agencies' Basel III Notice of Proposed Rulemaking (NPR) and Standardized Approach NPR. In June, the Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency approved joint proposals for comment that would revise their current regulatory capital standards. The public comment period for these proposals ends Oct. 22. The Basel III NPR focuses primarily on strengthening the level of regulatory capital requirements and improving the quality of capital. The Standardized Approach NPR proposes a number of enhancements to the risk sensitivity of the agencies' capital standards. The tool is intended to help institutions estimate the potential effect the proposals could have on their capital ratios …

NEW NCUAs Marquis to retire end of year

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ALEXANDRIA, Va. (9/24/12, UPDATED 9:45 a.m. ET)--After almost three and a half decades with the National Credit Union Administration (NCUA), Executive Director David Marquis has announced he will retire at the end of this year.

Since January 2009, Marquis' role at the agency has been to oversee its day-to-day as executive director. For the 14 years before that, he served as director of the Office of Examination and Insurance, where he was responsible for the safe and sound operation of the National Credit Union Share Insurance Fund (NCUSIF) and for monitoring the examination and supervision procedures at all federally insured credit unions.

Also during his 34 years at the agency, Marquis has served as a supervisory examiner, regional manager, associate regional director, regional director, and deputy director of the Office of Examination and Insurance. Marquis began his career with NCUA as an examiner in Baltimore.

"It is difficult to imagine this agency without Dave," NCUA Chairman Debbie Matz said, announcing Marquis' decision to leave in December. "Over the course of his career, Dave initiated many of the changes that enabled NCUA to protect the safety and soundness of the increasingly sophisticated credit union industry. Dave's foresight and diligence transformed NCUA's exam process to ensure that examiners have the requisite expertise, tools and training, and that exams are thorough and effective."

Since starting his career at NCUA in 1978, the credit union industry's total assets grew 1,860%, the NCUA release noted, from $51.4 billion to more than $1 trillion.  Matz said Marquis' "calm and steady leadership" during the economic downturn brought him "the admiration, trust and respect of the entire agency."

For more, read Tuesday's News Now.

Discover to refund 200 million on credit card complaints

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WASHINGTON (9/24/12)—Discover Financial Services made an announcement Friday that it has an agreement in principle with the Federal Deposit Insurance Corp. (FDIC) and the Consumer Financial Protection Bureau (CFPB) under which its subsidiary Discover Bank will refund about $200 million to its cardholders who purchased card protection products by telephone from December 2007 to August 2011.
 
The agreement also calls on Discover to pay another $14 million in civil monetary penalties to be split between the FDIC and the CFPB, and to enhance the company's marketing practices. Early this year, Discover Financial said it was notified by the two regulatory agencies of problems with the way it was marketing its fee-based card protection products—things like balance protection.
 
The Discover agreement follows by just a couple months a separate agreement between Capital One Financial and regulators, which revolved around that company's call center allegedly leading customers to pay too much for credit card products. Capitol One also agreed to pay about $200 million in refunds.

Inside Washington (09/21/2012)

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  • WASHINGTON (9/24/12)--The Federal Housing Financial Agency (FHFA) has proposed to adjust the guarantee fees that Fannie Mae and Freddie Mac charge for mortgages that finance properties with one to four units in certain states. The plan is intended to help the government-sponsored housing enterprises (GSEs), which are in conservatorship, to recover a portion of the "exceptionally high costs" they incur in cases of mortgage default in those states. The states affected are Illinois, Florida, Connecticut, New Jersey and New York. Also, the FHFA identified the principal drivers of differences across states in the average total carrying costs to the GSEs of a defaulted single-family mortgage, in order of importance, as:  the length of time needed to secure marketable title to the property; property taxes that must be paid until marketable title is secured; and legal and operational expenses during that period …
  • WASHINGTON (9/24/12)--Responding to recent criticism regarding the Office of the Comptroller of the Currency's (OCC) practice of embedding examiners at large banks, the head of that agency, Tom Curry, said in a speech last week to the Financial Services Roundtable that it was an important part of the agency's supervision program (American Banker Sept. 21). Curry said on-site examiners knew where weaknesses were and began putting capital and liquidity agreements in place at some institutions during the financial crisis--well before stress testing started. Curry told his audience that stress testing is an important supervisory tool but that it cannot replace supervisory "boots on the ground." He added that the OCC is improving its bank supervision by raising expectations for large banks; a step which he said includes raising standards for boards of directors, compensation and risk tolerance …
  • WASHINGTON (9/24/12)--Oklahoma, South Carolina and Michigan state attorneys general have joined a lawsuit challenging the constitutionality of the Dodd-Frank Wall Street Reform Act. (American Banker, Sept. 21) The lawsuit, which was filed in June by the State National Bank of Big Spring in Texas and two nonprofits, claims that Consumer Financial Protection Bureau (CFPB) Director Richard Cordray was illegally appointed to lead that agency, and states that the CFPB itself is unconstitutional. The lawsuit also named the U.S. Treasury and other agencies and directors as defendants, arguing that elements of Dodd-Frank that give federal authorities the ability to seize and wind-down financial institutions are unconstitutional. The attorneys general complaint focuses on the Federal Deposit Insurance Corp. and the Treasury Department ...

Interchange cap not helping consumers CUNA trades

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WASHINGTON (9/24/12)--With the one-year anniversary of debit interchange fee cap implementation approaching on Oct. 1, the Credit Union National Association (CUNA) and finance industry partners in a letter to Congress noted that "there is no evidence that consumers are seeing lower prices" on retail goods, a direct contrast from what they were promised by merchants.

"Despite promises by retailers, and despite a realized $8 billion windfall by these retailers over this past year, consumers have yet to see discounts for using their debit cards at the register," the letter said.

Credit unions and community banks are also being harmed by the regulation. The letter noted a U.S. Government Accountability Office (GAO) study released last week which found smaller community banks and credit unions, which were supposed to be "exempted" from the fallout of this legislation, have instead seen interchange revenue decreases of 5% in the first three months following interchange fee cap implementation. (See related News Now story: Dodd-Frank could mean mortgage costs for CUs: GAO)

Community banks and credit unions are struggling to maintain viable debit programs, and have had to raise their fees in some cases, the letter noted. "The GAO further concludes that even more harm to community banks and credit unions is likely as the marketplace evolves," the letter added.

The Federal Reserve Board's final rule implementing the interchange law capped large issuer debit interchange fees at 21 cents. An additional five basis points per transaction may be charged to cover fraud losses, and an extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards. Most credit unions are exempt from the fee cap.

The GAO report does not address any fee changes that occurred after network exclusivity and routing provisions took effect in April 2012. These provisions require financial institutions to enable their debit cards with two unaffiliated payment card networks, and this change "will likely cause even more substantial reductions in interchange fees to exempt issuers," the letter said.

Any further interchange regulations are "not only unnecessary, but an insult to consumers throughout the country," the letter said in closing.

The letter, which was sent to Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), Speaker of the House John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.), was co-signed by the American Bankers Association, Independent Community Bankers of America and the National Association of Federal Credit Unions.

For the full letter, use the resource link.

According to a May Fed survey, the average interchange fee received by credit unions and other debit card issuers that are exempt from the Federal Reserve's debit interchange fee cap was 43 cents per transaction in 2011. (See May 2 News Now story: Despite Fed survey, jury out on interchange impact: CUNA)

CUNA seeks comment on new P2P definitions

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WASHINGTON (9/24/12)--The Credit Union National Association (CUNA) is interested in how NACHA--the Electronic Payments Association's proposal to address mobile person-to-person (P2P) payments on the Automated Clearing House (ACH) network could impact credit unions, and has asked for credit union comment on the matter.

Mobile payments may currently use the WEB standard entry class (SEC) code, and many P2P payments are initiated by mobile devices. However, NACHA operating rules currently do not address P2P payments.

The NACHA proposal, which is scheduled to become effective on March 21, 2014, would:

  • Define a P2P entry as a credit entry initiated by or on behalf of a holder of a consumer account to a consumer account of a receiver;
  • Allow a credit version of the WEB SEC code to be used for a P2P credit transaction sent from a consumer's account; and
  • Establish standardized formatting requirements for the P2P WEB credit code.
The proposal would also add a requirement to permit Receiving Depository Financial Institutions (RDFIs) to initiate Notifications of Change (NOCs) related to P2P WEB credits, as well as NOCs for bill payment on the Customer Initiated Entries (CIEs).

In a comment call, CUNA asks credit unions to detail any cost, implementation or compliance concerns they may have regarding this proposal. Credit unions may also propose alternatives, and can recommend other implementation timeframes.

For the full comment call, use the resource link.

NCUA proposes some relief CUNA urges more

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ALEXANDRIA, Va. (9/21/12)—A series of regulatory relief proposals that could potentially benefit credit unions were approved by the National Credit Union Administration (NCUA) on Thursday, including proposals that would expand definitions of small credit unions and rural areas, and give credit unions greater investment authority.

Click to view larger image NCUA board members hear a staff presentation during Thursday's open board meeting. The September open board meeting will likely be the last for Board Member Gigi Hyland, right, who announced she will leave the board on Oct. 5. (See News Now story: Hyland sets Oct. 5 as exit date) (CUNA Photo)
The agency during the meeting also approved an advanced notice of proposed rulemaking that seeks public comment on its payday loan alternative program.

NCUA Chairman Debbie Matz said all four of these agenda items address issues raised by credit unions during the agency's recent listening sessions. "As we begin the second year of our regulatory modernization initiative, we will continue to listen to credit unions and other stakeholders to identify further opportunities to provide regulatory relief while protecting safety and soundness," she added.

The small credit union proposal, which was unanimously approved by the NCUA board, would triple the asset test that defines a "small" credit union--to $30 million in assets, up from the current $10 million threshold. Agency staff said they considered a range of new asset thresholds before settling on the $30 million limit.

Credit Union National Association (CUNA) President/CEO Bill Cheney following the meeting said CUNA appreciates the NCUA's decision to increase this threshold, "but we are convinced that it would be more beneficial--and realistic--for the board ultimately to go higher than that threshold."

The proposal will be released for a 30-day comment period, and NCUA Board Member Michael Fryzel encouraged credit unions that believe the threshold should be higher to state their case in their comments. "We fully intend to do just that," Cheney said.

If approved, the small credit union definition expansion would provide additional regulatory compliance relief for small credit unions in current and future regulations, such as risk-based net worth requirements and a pending interest rate risk final rule.

These newly added small credit unions would also have access to support services provided by the NCUA's Office of Small Credit Union Initiatives (OSCUI), and OSCUI Director William Myers said his staff is changing some training and consulting methods to broaden the scope of its work, but would not add new staff to help deal with the increased number of small credit unions. Rather, OSCUI would extend its reach by using technology and increasing efficiency in other areas.

The agency will reexamine its small credit union threshold every three years, if a new threshold is approved.

Matz said the agency wants to move the small credit union proposal quickly through the approval process. "To help more small credit unions remain viable, we need to provide greater resources and impose fewer burdens," she added.

The NCUA also approved:

  • A proposal that would allow credit unions to invest in Treasury Inflation Protection Securities (TIPS), which are government-issued securities that are repriced to reflect inflation and deflation, with the adjusted or original principal being paid out at maturity; and
  • A proposed rule that would expand the agency's definition of "rural district" for fields of membership to geographic areas with 200,000 or fewer inhabitants or less than 3% of a given state's population.
NCUA staff said the TIPS investment authority will provide credit unions with an additional investment portfolio risk management tool that can be useful in inflationary economies.

Cheney said CUNA supports both the TIPS investment authority and the "rural district" definition changes, but also urges the agency to consider expanding both proposals to cover state chartered credit unions.

The TIPS and rural district proposals will both be released for 60-day comment periods.

The NCUA on Thursday also released an advanced notice of proposed rulemaking (ANPR) seeking comment on how the agency could improve its Payday-Alternative Loan (PAL) rule, formerly known as short-term, small amount loans.

Federal credit unions are currently allowed to offer PAL loans to their members as an alternative to predatory payday loans that are offered by other financial service providers. Federal credit unions may charge an interest rate that is a maximum of 10 percentage points above the established usury ceiling at that time. A $20 application fee may also be charged. The loans may total as high as $1,000 and may last for as long as six months, and the loans cannot be rolled over.

The NCUA ANPR asks if the agency should consider alterations to the permissible short-term loan rate, loan range, loan maturity length, and other loan requirements. The agency also asked for details on any viable payday-alternative products credit unions are currently offering their members.

The PAL ANPR will be open for public comment for 30 days.

For more on the Thursday NCUA meeting, use the resource link.

CFPB to address credit access issues this year

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WASHINGTON (9/21/12)--A long-awaited draft of proposed rules that would address credit access issues faced by stay-at-home spouses will likely be released before the U.S. Congress returns from its upcoming election recess, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said during a Thursday House Financial Services Committee hearing.

Legislators last year contacted the CFPB, noting that the ability-to-repay rules, which require card issuers to consider a consumer's independent ability to make required payments on a credit card account before opening a new card account or increasing the credit limit on an existing account, have in some cases limited the ability of stay-at-home spouses to secure new lines of credit.

The ability-to-repay rule, as currently written, does not currently specifically address joint accounts or checking accounts, instead only advising card issuers to take into account assets such as savings accounts when it determines an individual's creditworthiness.

Cordray's announcement was prompted by a question from Rep. Carolyn Maloney (D-N.Y.), who is one of several House members that has asked the CFPB to conduct an extensive review of the impact that ability-to-pay rules are having on credit availability. Maloney, who helped write the ability-to-repay rules, said on Thursday that it was not her intention to create these credit issues, and noted that this credit access problem is both a consumer and a women's rights issue. These issues are the reason Congress moved to create the CFPB in the first place, she added.

In a letter sent to the CFPB late last year, Maloney and other members of Congress noted that the ability to repay standards were resulting in average lines of credit assigned to women that were well below the average assigned to men, and low approval rates for women in certain age groups, "especially for those 62 and over, who may be particularly likely to rely on the income of other household members."

Inside Washington (09/20/2012)

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  • WASHINGTON (9/21/12)--The Financial Services Roundtable named former Minnesota Gov. Tim Pawlenty as its new president/CEO, effective Nov. 1.  Pawlenty will take over for long-time CEO Steve Bartlett, who announced his retirement earlier this year. Pawlenty, 51, served as governor of Minnesota from 2003 to 2011 and before that was a member of the state's House of Representatives from 1993 to 2003, where he served two terms as Majority Leader. From 2007 to 2008, he chaired the bipartisan National Governors Association. The Financial Services Roundtable is a bipartisan organization …
  • WASHINGTON (9/21/12)--Federal Deposit Insurance Corp. board member Thomas Hoenig said bankers do not understand the public's dissatisfaction with their industry or the competitive advantage banks hold in the marketplace.  "It is alarming that CEOs of some financial firms fail to grasp why they are trusted so little nor appreciate the reputational damage they caused their industry," Hoenig said in a speech delivered to the Exchequer Club in Washington. "They acknowledge very little offense in taking a public subsidy and squandering it in a series of actions that place billions of taxpayer dollars at risk.  They fail to appreciate how in so many ways it seems that the game is fixed in favor of a privileged few. The public is aware that there seems to be no accounting for the enormous damage inflicted on our economy." Despite the addition of hundreds of regulations, the incentives facilitating the excesses leading to the crisis remain largely unchanged, Hoenig added …
  • WASHINGTON (9/21/12)--A group of Republican state attorneys general is refusing to sign cooperation agreements with the Consumer Financial Protection Bureau (CFPB). Only 12 states--all but one with Democratic attorneys general (AGs)--have signed the memorandum, which is designed to protect confidential information shared among states and the bureau (American Banker Sept 20). CFPB Director Richard Cordray asked all 50 states in March to sign the memorandum. The Republican AGs refusal to sign the documents is part Republican protest against the CFPB that began in the U.S. Congress, according to the article. Oklahoma AG Scott Pruitt said he is declining to sign the agreement because of legal objections to the Dodd-Frank Act, which created the CFPB …

Treasury launches new training for small CDFIs

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WASHINGTON (9/21/12)--The U.S. Treasury Department has announced new training under its Community Development Financial Institutions Fund (CDFI Fund) intended to strengthen small and emerging CDFIs, especially those serving specific regions of persistent poverty that are traditionally underserved by financial institutions.

The new training series is called "Strengthening Small and Emerging CDFIs" and will provide training and technical assistance, including "comprehensive capacity building services and resources…tailored to CDFI needs and the communities they serve."

The goal of training is to fill gaps in CDFI coverage in underserved communities across the country, the announcement said.  Opportunity Finance Network (OFN) is  the selected provider of the series.

OFN will also identify underserved areas, including areas of persistent poverty such as Appalachia, the Colonias along the U.S.-Mexico border, and the Mississippi Delta, and provide specific, proactive suggestions for filling gaps of services through product development and collaborations with strategic partners.

CDFI Fund Director Donna J. Gambrell said, "The targeted training and technical assistance that we're providing through this series will ultimately enable these CDFIs to increase their impact and bring quality financial products and services to communities across the country."

In August, Treasury announced it awarded a total of $186,853,456 to 210 CDFI organizations serving low-income communities, including credit unions or credit union organizations, as it closed it fiscal year 2012 grants and awards program.

Hyland sets Oct. 5 as exit date

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ALEXANDRIA, Va. (9/21/12)--Noting the announcement of National Credit Union Administration (NCUA) board member Christiane "Gigi" Hyland that she will resign from the board as of Oct. 5, Credit Union National Association President/CEO Bill Cheney said, "Gigi Hyland has given seven strong and substantive years of service to both credit unions and the agency" during her years on the board.

"At times we have had our differences over policy, but we have always respected her views and knew that she innately had the best interests of credit unions at the core of her positions," Cheney said, and
NCUA board member Gigi Hyland, shown here addressing the 2012 CUNA Governmental Affairs Conference, said she will leave her position at the agency on Oct. 5. (CUNA Photo)
added, We wish her the very best, and we are certain that we will have more opportunities to work with her, in another capacity, somewhere down the road."

Hyland was sworn in as an NCUA board member on Nov. 18, 2005 for a six-year term, which ended Aug. 2, 2011. Prior to her time on the board, Hyland's credit union career included work as a credit union attorney and advocate for more than 14 years. She was a Credit Union National Association vice president for five years.

NCUA Board Chairman Debbie Matz said of Hyland's tenure at the NCUA, "Gigi has been an exemplary public servant. The credit union industry and the agency have been the beneficiaries of her intellect, tenacity and dedication to a safe and sound system."

Matz noted Hyland's initiative of updating the rules to raise the small credit union asset threshold, as proposed at today's NCUA open board meeting, as one of her most important.

Fellow board member Michael Fryzel said Hyland has been an "outstanding" NCUA board member. "She has brought knowledge, integrity and common sense in making tough decisions during troubled economic times."

Fryzel added, "Her ideas, collaboration and cooperation during the credit union crisis of 2008 to 2009, when I was chairman, were invaluable and for which I am sincerely grateful. I wish her all the best on her career path and know she will succeed at whatever she chooses to do."

Hyland, in her resignation announcement concluded, "It has been an honor to serve our country to protect the safety and soundness of nearly 7,000 federally insured credit unions and over 93 million credit union members."

After Oct. 5, Hyland says she plans to take time off before considering future professional opportunities.

NEW Hyland to leave NCUA Oct. 5

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ALEXANDRIA, Va. (9/20/12, UPDATED 1:25 p.m. ET))--National Credit Union Administration (NCUA) board member Christiane "Gigi" Hyland today announced her resignation, effective Oct. 5.

Hyland was sworn in as an NCUA board member on Nov. 18, 2005 for a six-year term, which ended Aug. 2, 2011. Prior to her time on the board, Hyland's credit union career included work as a credit union attorney and advocate for more than 14 years.

NCUA Chairman Debbie Matz said of Hyland's tenure at the NCUA, "Gigi has been an exemplary public servant. The credit union industry and the agency have been the beneficiaries of her intellect, tenacity and dedication to a safe and sound system."

Matz noted Hyland's initiative of updating the rules to raise the small credit union asset threshold, as proposed at today's NCUA open board meeting, as one of her most important.

Fellow board member Michael Fryzel said Hyland has been an "outstanding" NCUA board member. "She has brought knowledge, integrity and common sense in making tough decisions during troubled economic times."

Fryzel added, "Her ideas, collaboration and cooperation during the credit union crisis of 2008 to 2009, when I was chairman, were invaluable and for which I am sincerely grateful. I wish her all the best on her career path and know she will succeed at whatever she chooses to do."

Hyland, in her resignation announcement concluded, "It has been an honor to serve our country to protect the safety and soundness of nearly 7,000 federally insured credit unions and over 93 million credit union members."

After Oct. 5, Hyland says she plans to take time off before considering future professional opportunities.

See News Now Friday edition for more.

NEW NCUA proposes 30M as small CU definition

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ALEXANDRIA, Va. (9/20/12, UPDATED 10:50 a.m. ET)—The National Credit Union Administration (NCUA) this morning proposed to triple the asset test that defines a "small" credit union—to $30 million in assets, up from the current $10 million.

Regulatory burden is an issue for credit unions of all sizes, but NCUA Director of Examinations and Insurance Larry Fazio has noted that regulatory burdens can be exponentially more difficult for small credit unions to deal with, since they must comply with essentially all the same regulations as larger credit unions.

When making regulatory changes, the NCUA takes a special look at how a rule change will impact small credit unions, and so the new definition will gather more credit unions under the umbrella.

Also, this morning the NCUA issued a proposal that would allow credit unions to invest in Treasury Inflation Protection Securities (TIPS), another topic that was highlighted in the NCUA 2012 'listening sessions." TIPS are government-issued securities that are repriced to reflect inflation and deflation, while the adjusted or original principal is paid at maturity.

Also on today's open board meeting agenda:

  • A proposed rule that would expand the agency's definition of "rural district" for fields of membership; and
  • An Advanced Notice of Proposed Rulemaking related to payday-alternative loan regulations.
See tomorrow's News Now for full coverage.

Inside Washington (09/19/2012)

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  • WASHINGTON (9/20/12)--U.S. House members voted late last week to increase the federal government's subsidy for loans backed by the U.S. Small Business Administration (SBA). The increase is needed because of higher default rates on SBA-backed loans made from 2005 to 2008 (American Banker Sept. 19). Under the stopgap measure, the House agreed to raise the SBA's federal subsidy to $333 million from $210 million appropriated for the current fiscal year, which ends Sept. 30. "The goals of our oversight changes are twofold: ensuring that our loans benefit only the small businesses for which the lending programs are intended, and protecting the taxpayer dollars that support our loan programs," SBA administrator Karen Mills told the House Small Business Committee in June. "We believe we now have the tools and structures in place to more effectively achieve both goals. But there are some obstacles that we must overcome." The challenges relate to the "stratification" of its current portfolio …

CFPB to discuss mortgage changes more before Congress

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WASHINGTON (9/20/12)--Consumer Financial Protection Bureau (CFPB) Director Richard Cordray will appear before the House Financial Services Committee in a hearing scheduled for today, the second hearing of its kind in the past week.

The hearing, which is scheduled to begin at 10 a.m. (ET), is fittingly entitled "The Semi-Annual Report of the Consumer Financial Protection Bureau," and is the semi-annual report of Cordray on CFPB activities and issues.

On Sept. 16 in a similar hearing on the Senate side, Cordray told Sen. Richard Shelby (R-Ala.) and other members of the Senate Banking Committee that his agency "cannot ignore or re-write" the laws that Congress mandates, but indicated that where appropriate, the agency intends to use its exemption authority to potentially exempt certain smaller institutions such as community banks and credit unions from certain regulatory provisions "where they don't make sense."

Shelby was concerned that the CFPB may ignore or attempt to re-write the Dodd-Frank Act by utilizing its exemption and modification authority.

The CFPB's pending proposal on mortgage servicing will certainly be a topic of conversation during today's hearing, and Cordray in a prepared statement said these regulatory changes would "make sure consumers do not receive mortgages that they do not understand or cannot afford" and will "bring greater transparency and accountability to mortgage servicing."

Final versions of new mortgage regulations, and related disclosures that combine elements of Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures into a single document are expected to be released in January. The Credit Union National Association (CUNA) is accepting credit union comment on several aspects of the proposal, and CUNA has also attempted to give credit unions a rough outline of which specific mortgage practices the CFPB proposals could address in a recent CompBlog post.

CUNA noted that a number of the mortgage lending rules that will be finalized in 2013 will apply to subordinate-lien mortgage loans in addition to first-lien mortgage loans. Some of the rules will also apply to home-equity lines of credit (HELOCs), CUNA added.

Ability-to-Repay (Regulation Z) changes will apply to any first-lien or subordinate-lien mortgage loan that is secured by a dwelling, including primary residences or second homes, but will not apply to HELOCs, timeshare plans, reverse mortgages, and temporary mortgage loans.

Regulations addressing appraisals for higher-risk mortgage loans, which are also part of Reg Z, will apply to any first-lien or subordinate-lien mortgage loan including loans on a dwelling or real property that includes a dwelling. Qualified mortgages and reverse mortgages will not be impacted by the regulatory changes, CUNA said.

Portions of the CFPB changes that impact Equal Credit Opportunity Act appraisals will apply to first-lien mortgage loans, and changes to portions of Reg Z impacting escrow accounts will apply to closed-end mortgage loans secured by a first-lien on real property or a dwelling, including principal dwelling and second home, mobile homes, boats and trailers used as residences, CUNA added.

Regulatory revisions related to high-cost mortgage loans will apply to most types of mortgage loans secured by the consumer's principal dwelling including first-lien home purchase mortgage loan, subordinate-lien loans including closed-end home equity loans and HELOCs, but will not apply to reverse mortgages.

All closed-end mortgage transactions, including first-lien, subordinate-lien and refinancings, will be subject to the CFPB's mortgage originator standards changes. Pending mortgage servicing changes will also impact closed-end mortgage loans, including first-lien and subordinate-lien loans, but HELOCs, construction loans and business purpose loans will not be affected, CUNA said.

The integrated TILA-RESPA mortgage disclosure forms will need to be used in most closed-end mortgage loan transactions, including first-lien and subordinate-lien mortgage transactions. However, these disclosures will not be used for reverse mortgages, mortgage loans secured by a mobile home or by a dwelling that is not attached to real property, nor HELOCs, CUNA said.

The CompBlog post also noted that the effective dates of the final rules will likely range from mid-year 2013 to early 2014. In the post, CUNA encouraged credit unions to budget for any additional personnel, staff training, data processing and software changes, and forms changes that will occur once the CFPB regulatory changes are finalized.

NCUA to propose small CU rural district definition tweaks

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ALEXANDRIA, Va. (9/20/12)--A small credit union regulatory relief proposal is one of the potentially positive items on today's National Credit Union Administration (NCUA) open meeting agenda. The agency is expected to propose to increase the asset threshold used to define "small." The Credit Union National Association supports increasing the threshold.

The open meeting is scheduled to begin at 10 a.m. ET.

The NCUA's open agenda also includes:

  • A proposed rule that would permit credit unions to invest in Treasury Inflation Protected Securities;
  • A proposed rule that would expand the agency's definition of "rural district" for fields of membership; and
  • An Advanced Notice of Proposed Rulemaking related to payday-alternative loan regulations.
The closed portion of the NCUA's board meeting is scheduled to begin at 8:30 a.m. ET, just before the open session. Creditor claim appeals and personnel issues will be on the agenda for the closed meeting. However, the NCUA on Wednesday modified the closed meeting agenda by removing consideration of one personnel matter from the agenda.

For the full NCUA agenda, use the resource link.

CUs only lenders to increase 2011 mortgage lending FFIEC

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WASHINGTON (9/19/12)--Home purchase mortgage loans orignated at credit unions increased by 8.5% in 2011, and credit unions were the only type of financial institution to increase their mortgage lending in that year, according to Federal Financial Institutions Examination Council (FFIEC) data.

Mortgage lending for home purchases at banks decreased by 7.1%, and mortgage lending at thrifts declined by 24.1% during 2011, the FFIEC added.

Overall, the FFIEC reported that the total number of originated loans of all types and purposes declined by 780,000 between 2010 and 2011, in part due to a 13% decline in refinancings.

These numbers are part of the FFIEC's data on the mortgage applications, originations, purchases, and denials that were filed by credit unions and other Home Mortgage Disclosure Act (HMDA) -covered financial institutions in 2011. Documents detailing this data were released on Tuesday.

Under HMDA, credit unions with total assets of more than $40 million that have home or branch offices in defined metropolitan statistical areas must collect their loan data and report it to federal regulators.

The Federal Reserve in a separate release on the FFIEC data noted that the overall credit scores of borrowers are "considerably higher now than at any point in the past 12 years." The median score of mortgage borrowers has risen about 40 points since the end of 2006, the Fed said.

The FFIEC mortgage data covers transactions at 7,632 financial institutions, 2,017 of which were credit unions. The data also includes information on 11.7 million home loan applications, 7.1 million of which resulted in loan originations, and 2.9 million loan purchases. Information on 186,000 loan preapproval requests that did not result in home loans is also included.

The Fed noted that the 7.1 million loan originations reported in 2011 is the lowest loan total recorded in HMDA data since 1995's total of 6.2 million. Government-backed loans originated through the Federal Housing Administration's mortgage insurance program, the Department of Veterans Affairs (VA) loan guarantee program, and other government programs accounted for nearly 50% of all home purchase loans made in 2011, a slightly smaller share than the total reported in 2010, the Fed added.

The FFIEC data also includes disclosure statements, aggregate data for metropolitan statistical areas, nationwide summary statistics of lending patterns, and Loan/Application Registers, the FFIEC said. The data is further broken down by loan type, loan purpose, loan amount, property type, property location, applicant background, and census tract characteristics.

For more on the FFIEC report, use the resource link.

The FFIEC is comprised of the leaders of the National Credit Union Administration (NCUA), the Federal Reserve Board, the office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Deposit Insurance Corp. (FDIC), and the newest member, the Consumer Financial Protection Bureau. NCUA Chairman Debbie Matz succeeded FDIC Chairman Sheila Bair as head of the FFIEC on March 4, 2011. She is serving a two-year term.

Congress not just NCUA must act on MBLs says CUNA

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WASHINGTON (9/19/12)--While credit unions certainly appreciate any actions the National Credit Union Administration (NCUA) takes to reduce their regulatory burden and allow them to better serve their members, the Credit Union National Association (CUNA) is still urging the U.S. Congress to act to help credit unions meet rising business loan demands and to help our economy more quickly recover, CUNA President/CEO Bill Cheney said.

Cheney's remarks followed the NCUA's release of a legal opinion letter that expanded the definition of "fleet" of vehicles, as used in its member business lending (MBL) rule, to mean five or more vehicles. The Sept. 13 NCUA opinion said the agency's former use of two vehicles to define fleet was "overly restrictive."

The NCUA said the revision better reflects "marketplace realities" and provides regulatory relief to credit unions, enabling them to more effectively serve the business needs of their members.

This effort to lighten the load on credit unions is commendable, Cheney said--and CUNA appreciates it. However, the CUNA leader acknowledged there are limits to what the NCUA can do. "It is hard to foresee an action that the agency could take which ultimately would have the impact that passage of member business lending legislation would have for small business and for credit unions. Passage of this vital legislation remains our top priority," he added.

This effort to lighten the load on credit unions is commendable, but there are limits to what the NCUA can do, Cheney said. "It is hard to foresee an action that the agency could take which ultimately would have the impact that passage of member business lending legislation would have for small business and for credit unions. Passage of this vital legislation remains our top priority," he added.

Bills that would increase the MBL cap to 27.5% of assets, from 12.25%, have been introduced in the House and Senate. Members of both parties support the MBL cap increase bills, and H.R. 1418 has 140 cosponsors. S. 2231 has 21 cosponsors, and Senate leadership remains committed to a floor vote on the MBL legislation. Udall and Royce are sponsors of the bills in their respective chambers.

CUNA has estimated that an MBL cap increase would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment. Both benefits would come at no cost to taxpayers.

The NCUA in a release said the "fleet" definition revision gives credit unions greater flexibility in making lending decisions. A credit union making a loan to a member who owns a business with fewer than five vehicles would qualify for a loan-to-value exception under current regulations, according to the NCUA.

The agency emphasized that its legal opinion is "consistent with the way fleet vehicles are treated by the IRS and auto industry standards."

In reviewing how best to define "fleet," the NCUA said it evaluated case law, how other government agencies use the term, and auto industry standards. NCUA Associate General Counsel Frank Kressman, who penned the opinion, said the agency was "particularly persuaded" by Internal Revenue Service (IRS) publications on the topic and treatment of fleets by auto industry fleet programs.

"Accordingly, we amend the definition of 'fleet' as follows: A fleet is five or more vehicles that are centrally controlled and used for a business purpose, including for the purpose of transporting persons or property for commission or hire.

"The revised definition also addresses our safety and soundness concerns about collateral devaluation. In this definition, we intend to capture only those vehicles that depreciate at a faster rate than personal vehicles not used for a commercial purpose," Kressman wrote.

However, the opinion letter added, the NCUA continues to expect credit unions to properly underwrite MBLs, taking into account all risks posed by business lending.

The opinion was requested by John Hirabayashi, president and CEO, Community First CU of Florida, who is on CUNA's Examination and Supervision Subcommittee.

For the full NCUA release, use the resource link.

CUNA seeks comment on CFPB mortgage servicing proposal

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WASHINGTON (9/19/12)--Credit unions can detail the compliance costs and regulatory burdens associated with the Consumer Financial Protection Bureau's (CFPB) pending proposal on mortgage servicing, and the efforts it will take to implement these changes, in a new Credit Union National Association (CUNA) Comment Call.

The Comment Call is one of several released by CUNA on recent CFPB's proposals.

The proposed rules regarding mortgage servicing would amend Regulation Z, which implements the Truth in Lending Act (TILA), and Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA). The regulations would coordinate with changes proposed in connection with the combined TILA and RESPA forms that will be provided for most closed-end mortgage loans.

The mortgage forms and proposed rules are scheduled to be finalized by January.

In this latest Comment Call, CUNA has asked for information from credit unions on what types of exemptions might be appropriate for small servicers and how much time credit unions will need to effectively implement the mortgage changes. The Comment Call also notes that the CFPB has sought comment on the impact of delayed implementation on consumers and on other market participants.

Credit unions may also comment on the CFPB's proposed payoff statements, timing requirements for periodic statements, and their own methods of combining financial statements for their members. Comments on rate changes, late fees, and prepayment penalty changes are also requested in the Comment Call.

For the full CUNA Comment Call, use the resource link.

Inside Washington (09/18/2012)

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  • WASHINGTON (9/19/12)--After a quiet summer, financial system regulators are under pressure to release a slate of contentious new rules before the end of 2012, according to the American Banker (Sept. 18). Among the areas the rules will cover a ban on proprietary-trading ban, mortgage regulations and a scheme for identifying systemically important financial institutions (American Banker Sept. 18). First, the Volcker Rule, a provision to stop banks from engaging in proprietary trading, was supposed to become effective two months ago. Martin Gruenberg, the acting Federal Deposit Insurance Corp. chairman, last week said regulators are working toward completing the rule by year-end. Second, the Dodd-Frank Act requires the Consumer Financial Protection Bureau to finalize a qualified mortgage (QM) rule by Jan. 21 that would require lenders to verify a borrower's ability to repay unless a loan is a QM. Lenders and consumer advocates have argued over the definition of a QM, and how much lenders should be protected from liability when they make loans that involve qualified QMs. Third, the Federal Reserve is reviewing two sets of proposals that would establish new industry standards under section 165 of the Dodd-Frank Act and the Basel III accord. The Dodd-Frank rules would set new capital and liquidity standards, and other requirements, for systemically important financial institutions. The agency also released a proposal to implement capital and liquidity requirements under the Basel III accord. However, industry observers say the complexity of the Dodd-Frank rules and the Basel III proposal may prevent their approval by the end of the year. Fourth, the Financial Stability Oversight Council is expected move forward "in earnest" with establishing rules formally designating certain nonbanks as systemically important financial institutions, said Coryann Stefansson, managing director at PricewaterhouseCoopers. And finally, the Commodity Futures Trading Commission is expected to finalize several derivative regulations in the fourth quarter, according to industry observers …

NEW NCUA opinion loosens fleet definition

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ALEXANDRIA, Va. (UPDATED: 12:25 P.M. ET, 9/18/12)--The National Credit Union Administration (NCUA) has expanded the  definition of "fleet" of vehicles, as used in its member business lending rule, to mean five or more vehicles--saying its former use of two vehicles to define fleet is "overly restrictive."

The NCUA, in a legal opinion letter dated Sept. 13, said the revision better reflects "marketplace realities" and provides regulatory relief to credit unions, enabling them to more effectively serve the business needs of their members.

The NCUA said that in reviewing how best to define "fleet," it evaluated case law, how other government agencies use the term, and auto industry standards.  NCUA Associate General Counsel Frank Kressman, who penned the opinion, said the agency was "particularly persuaded" by Internal Revenue Service publications on the topic and treatment of fleets by auto industry fleet programs.

"Accordingly, we amend the definition of 'fleet' as follows: A fleet is five or more vehicles that are centrally controlled and used for a business purpose, including for the purpose of transporting persons or property for commission or hire.

"The revised definition also addresses our safety and soundness concerns about collateral devaluation. In this definition, we intend to capture only those vehicles that depreciate at a faster rate than personal vehicles not used for a commercial purpose," Kressman wrote.

However, the opinion letter added, the NCUA continues to expect credit unions to properly underwrite MBLs, taking into account all risks posed by business lending.

The opinion was requested by John Hirabayashi, president and CEO, Community First CU of Florida, who is on CUNA's Examination and Supervision Subcommittee.

"This is a positive development, and we encourage the agency to replicate this approach as often as possible," said Mary Dunn, CUNA deputy general counsel.

Inside Washington (09/17/2012)

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  • WASHINGTON (9/18/12)--Bankers stressed the importance of communication between themselves and examiners during roundtables hosted by the Federal Deposit Insurance Corp., Martin Gruenberg, acting chairman of the agency, said Friday at American Banker's Regulatory Symposium. "It is no surprise that we heard from community bankers about supervision and regulation," Gruenberg said. "Community bankers said that communication between examiners and the banks is crucial. This is particularly true in the pre-exam planning process. Bankers expect that the materials they provide to facilitate this advance planning will enable examiners to be as efficient as possible once they are on site. We have also heard that the examiners' communication with management at the beginning of the exam should clearly lay out the focus and goals of the exam." Communication issues with examiners also are challenging credit unions. In an internal review requested by the U.S. Congress, the National Credit Union Administration's Office of the Inspector General found inconsistencies in how small credit union examination policies and procedures are implemented (News Now Sept. 12) …

Blumenauer urges MBL increase from House floor

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WASHINGTON (9/18/12)--In an address on the U.S. House floor that has both been posted online and entered into the Congressional Record, Rep. Earl Blumenauer (D-Ore.) urged his congressional colleagues to advocate for legislation (H.R. 1418) that would increase the cap on credit union member business lending (MBL).

"Maybe it's time to give small businesses a boost by giving commercial banks a little competition" in the financial arena, Blumenauer said and noted that "for millions of Americans…a little competition to the big banks comes from credit unions."

Blumenauer's House-floor push for support of H.R. 1418 came as a delegation of credit unions from the northwest and representatives from Northwest Credit Union Association (NWCUA) Hiked the Hill to support credit union issues, such as increased MBL authority.

In his floor statement, Blumenauer pointed out that most credit unions are small- to medium-size, "very local," and that they are not-for-profit, often with volunteers as their board members. Since credit unions are owned by their members, and not by stockholders, they don't pay dividends to stockholders or "multi-million dollar bonuses to CEOs," Blumenauer said.

Instead, credit unions use their resources to keep down costs and increase service to members, Blumenauer highlighted.

But, he reminded lawmakers, credit unions currently are limited to lending no more than 12.25% of their assets to their small businesses members.

"Now legislation has been proposed to raise that cap to a little more than a quarter of a credit union's assets and that would be ideal for small business lending.

"It wasn't the credit unions on Main Street that almost brought the economy to its knees; it was the Wall Street gamblers and, too often, cheaters in the financial sector.

"Maybe it's time that we give small businesses a boost by giving commercial banks a little competition," He concluded as he urged lawmakers to advocate for the Small Business Lending Enhancement Act.

The Senate version of the legislation is S. 2231. A Senate vote has been promised this year and CUNA has every expectation that vote will occur, CUNA Senior Vice President of Legislative Affairs Ryan Donovan said.

Compliance Moving forward with MFOEL rules

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WASHINGTON (9/18/12)--CUNA Mutual Group Director of Regulatory Compliance Bill Klewin recently offered credit unions a look at their options as they evaluate whether a restricted multi-featured, open-end lending (MFOEL) plan still meets their needs.

Klewin, during a Credit Union National Association (CUNA) quarterly pressing compliance issues audio conference and a recent CompBlog guest post, discussed the impact of the National Credit Union Administration's (NCUA's) recent guidance (Letter 12-FCU-02) on credit unions' MFOEL and multi-featured lending (MFL) plans.  That guidance supersedes an NCUA letter issued in September 2010 and confirms that MFOEL is a permissible method to make consumer loans.

The new letter states that a foundation of open-end lending is that consumers apply for credit only at account opening so underwriting must take place only at account opening. However, the issue of greatest importance to credit unions is the prohibition of any form of verification at the time of an advance request.

The letter, on page 3, states "Changes to the Official staff commentary (July 2010) essentially mean credit unions offering MFOEL plans may 'occasionally or routinely' verify credit information, but verification of credit information cannot be done 'as a condition' of granting a new advance under the plan."

Klewin notes the practical impact for most credit unions is:

  •  If a credit union had already moved to closed-end lending for some types of transactions, such as car secured loans, it is likely this letter has no impact;
  • A credit union wishing to continue to use an MFOEL plan would need to rely on periodic reviews of a member's creditworthiness, and not rely on any such review at the time of an advance request;
  • A combination of open-end and closed-end programs is the most likely and best result.  Open-end lending would be appropriate, for example, for lines of credit and subaccounts that require no verification of creditworthiness at the time of an advance, such as share or CD secured subaccounts.  Closed-end processes and disclosures are appropriate for loan types like car or boat secured loans, or large unsecured transactions, like debt consolidation loans, where a credit union feels verification of creditworthiness is needed at the time of a loan request; and
  •  The convenience and familiarity of MFOEL for your staff and members is gone.  Some of the convenience can be replaced through digital signatures, pre-approved draft programs, and other processes, but lending convenience for members has been lessened. 


Klewin also offers "a few random observations" about the MFOEL guidance: 

  • These rules apply to all open-end lending, whether simple lines of credit, MFOEL, credit cards, or home equity lines of credit (HELOC).  Will NCUA examiners be reviewing for compliance all these kinds of open-end programs?  Do they understand the ramifications of the rules, especially for HELOC's, where large advance requests are common?
  • There are unanswered questions. For example, what if a borrower with a $2,000 credit limit on a line of credit, requests a $5,000 advance and an increase of their credit limit at the same time? Common sense says you should be able to review that person's creditworthiness, even if it is only for the amount of the request over the original $2,000 credit limit.  A strict reading of NCUA Letter 12-FCU-02 would say you may not do such a review as it is based on an advance request.
  • There is no such thing as a "closed-end" line of credit. If a credit union says it has a line of credit, but it reviews credit at the time of an advance request, it has a "closed-end line of credit."  What the credit union really has is a series of closed-end loans under the rule.
Also, credit unions that verify certain limited information at the time of an advance request such as a member's credit score or debt-to-income ratio or that confirm information at the time of an advance request such as the member's income and employment status will have to discontinue such practices if they want to continue making such loans as open-end loans.

For more on MFOEL, use the resource link to access CUNA's CompBlog and look at posts on Sept. 12 and Sept. 13.

CUNA gives compliance officer advice in iCU Magazinei

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WASHINGTON (9/17/12)--Credit Union National Association (CUNA) Federal Compliance Counsel Colleen Kelly welcomed newly promoted compliance officers to the family, and, with the help of compliance veterans, gave them advice on how to adapt to their new position, in  September's Credit Union Magazine.

As they take on their new role, compliance professionals should seek out as much training as possible, the Credit Union Magazine article said. Online training webinars and compliance schools are great options, and becoming a certified "credit union compliance expert" (CUCE) through CUNA's RegTrac certification program will also help. State credit union leagues and other outside sources also offer local compliance seminars.

New compliance officers should also develop a network of colleagues that they can call on, and should particularly work to develop relationships with compliance officers from credit unions of similar sizes to theirs. Local and regional compliance roundtables exist to aid this kind of networking, and CUNA's compliance schools can also serve as a meeting place for new colleagues, Kelly wrote. CUNA offers these schools at least four times per year.

The item also recommends that new compliance officers:

  • Acquaint themselves with online resources, including CUNA's e-Guide to Federal Laws and Regulations and other CUNA resources, state league resources such as InfoSight, and home pages for various regulators, including the National Credit Union Administration, the Financial Crimes Enforcement Network, and the Consumer Financial Protection Bureau; and
  • Subscribe to daily blogs and e-mail lists, such as CUNA's daily compliance blog, CompBlog, CUNA's Compliance Brainstorming on the Web (COBWEB) compliance e-mail list, and other RSS feeds.
On the job, compliance officers should be sure their colleagues understand the importance of regulatory compliance, and should not be afraid to tell colleagues with questions "let me check on that and get back to you." When facing a compliance issue, accuracy always outweighs expediency, Kelly said.

While compliance officers can be seen as the bearer of bad news, they also have a chance to become a "go-to" resource that helps their credit union create compliance solutions.

Compliance officers aren't there to make the rules, they are just there to interpret them, Kelly noted.

Getting involved in the development, improvement, and promotion of products and services as early as possible can help avoid late-breaking compliance issues. In addition, keeping good records can aid compliance officers if noncompliance issues crop up at a later date, Kelly said.

And, in closing, the Credit Union Magazine item offered one final piece of advice: "maintain a sense of humor, and get a dog."

NCUA donates new laptops to small CUs

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ALEXANDRIA, Va. (9/17/12)--New computers and computer training are on the way for 14 small credit unions, courtesy of the National Credit Union Administration's (NCUA) Office of Small Credit Union Initiatives.

The free laptops and training will be provided to:
  • Gloucester Municipal CU, Gloucester, Mass.;
  • Great Neck School Employees FCU, Great Neck, N.Y.;
  • McKeesport Congregational FCU, McKeesport, Pa.;
  • Millwrights/Pile Drivers of Pittsburgh FCU, Saltsburg, Pa.;
  • Monumental CU, Chicago, Ill.;
  • Noxen Community CU, Monroe Township, Pa.;
  • Northern States Power Employees FCU, Grand Forks, N.D.;
  • Plainfield (N.J.) CU;
  • Prince FCU, Brooklyn, N.Y.;
  • Saint Norbert's CU, Pittsburgh, Pa;
  • San Fernando Valley Japanese CU, Sylmar, Calif.;
  • St. Monica FCU, Gary, Ind.;
  • Williamsport Teachers CU, Williamsport, Pa.; and
  • Zion Hill Baptist Church FCU, Los Angeles, Calif.
All of these credit unions hold less than $10 million in assets, according to the NCUA.

The laptop donations are part of the agency's efforts to eliminate paper call report filings in 2013.

The new laptops will help these credit unions improve their member service, file their call reports electronically, and modernize other recordkeeping. They will also reduce their environmental footprints, the NCUA noted. NCUA Chairman Debbie Matz said the agency is "constantly seeking opportunities to give small credit union managers the tools, training, support, and resources needed to improve efficiency and aid in the economic viability of their institutions."

For the full NCUA release, use the resource link.

FinCEN reaches out to BSA filers on e-filing

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WASHINGTON (9/17/12)--While the Financial Crimes Enforcement Network (FinCEN) has required electronic filing of all Bank Secrecy Act (BSA) reports since July 1, some financial institutions are still filing these reports in the older paper format. FinCEN has reached out to these firms in a bid to correct this mistake.

FinCEN reported its new e-filing platform, launched this summer, had issues that prevented BSA filers from sending those forms electronically. However, FinCEN noted, the issues have been resolved, and the system is now functioning properly.

Currency Transaction Reports, Designations of Exempt Persons, and Suspicious Activity Reports are among the reports that can be e-filed. Almost all BSA reports must now be e-filed, but Currency and Monetary Instrument Reports are not covered under the e-filing requirement. Firms that continue to file paper versions of BSA forms may face civil money penalties, FinCEN said.

The switch to all-electronic BSA filing will improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information, according to the agency. Increased BSA e-filing will also help speed up financial crime investigations.

The agency has scheduled a pair of upcoming webinars to help BSA filers adjust to the filing changes.

FinCEN Query, a new application that will allow law enforcement and regulatory officials to access and analyze 11 years of BSA reports and other data, was released this week by the agency.

For more on the webinar and FinCEN Query, use the resource links.

CUNA trades urge QM clarity in letter to CFPB

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WASHINGTON (9/17/12)--The Credit Union National Association (CUNA) and other financial trade groups have urged the Consumer Financial Protection Bureau (CFPB) to broadly define qualified mortgages and provide mortgage lenders with a legal safe harbor from ability-to-repay litigation.

In a recent letter, which was sent Friday to CFPB Director Richard Cordray, CUNA and the groups said the qualified mortgage definition must meet three requirements:

  • Qualified mortgage must be broadly defined to include the vast majority of very high quality loans being originated in today's market;
  • The product, documentation and underwriting requirements must be based on objective, bright line standards; and
  • Lenders and investors must be granted a clearly defined legal safe harbor from ability-to-repay litigation when they originate loans that meet the qualified mortgage standards.
A broad qualified mortgage definition, with bright line standards embedded in a legal safe harbor, "is the only sure means to serve the widest array of qualified borrowers with affordable credit," the letter said. "A safe harbor will result in far more mortgage borrowers obtaining sustainable credit," the letter added.

Under a still-developing CFPB rule, mortgage originators would be required to consider a homebuyer's ability to repay a loan before the loan is offered. The CFPB's ability-to-repay requirements would apply to consumer credit transactions that are secured by a dwelling and be further defined by the agency's definition of a qualified mortgage.

"As the agency works to finalize the rule, which is required to be published by January of next year, we want to ensure credit unions will be able to serve the widest array of qualified member/borrowers as possible," CUNA Deputy General Counsel Mary Dunn said.

The letter was co-signed by the American Bankers Association, the American Financial Services Association, the Consumer Bankers Association, the Community Mortgage Banking Project, the Consumer Mortgage Coalition, the Housing Policy Council of the Financial Services Roundtable, the Independent Community Bankers of America, the Mortgage Bankers Association and the National Association of Federal Credit Unions.

For the full letter, use the resource link.

Inside Washington (09/14/2012)

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  • WASHINGTON (9/17/12)--Consumer Financial Protection Bureau (CFPB) Director Richard Cordray sought to allay Sen. Richard Shelby's (R-Ala.) concerns that the CFPB may ignore or attempt to re-write the Dodd-Frank Act by utilizing its exemption and modification authority. In a Thursday hearing before the Senate Banking Committee, Cordray said his agency "cannot ignore or re-write" the laws that Congress mandates, but indicated that where appropriate, the agency intends to use its exemption authority to potentially exempt certain smaller institutions such as community banks and credit unions from certain regulatory provisions "where they don't make sense." Cordray also delivered prepared remarks during the Thursday hearing. The Credit Union National Association will continue to urge the CFPB and its officials that credit unions must see more action with respect to the agency's exemption authority ...
  • WASHINGTON (9/17/12)--The Hill newspaper has posted a news story on the Credit Union National Association's Sept. 12 member business lending press event, and an accompanying three-minute video clip of Sen. Mark Udall's (D-Colo.) remarks at the event. The Capitol Hill event highlighted House and Senate legislation that would increase the credit union MBL cap to 27.5% of assets, from 12.25%. An archived video of the event has also been posted on The Hill's home page ...
  • WASHINGTON (9/17/12)--Strong enforcement of The Fair Credit Reporting Act (FCRA) remains a top priority for the Federal Trade Commission FTC, an agency official said in testimony before a House subcommittee Wednesday http://www.ftc.gov/opa/2012/09/fcra.shtm. The agency is committed to educating consumers and businesses about consumer reports, credit scores, and their rights and obligations under the FCRA, Robert Schoshinski, assistant director of the Division of Privacy and Identity Protection, said   The FTC has played a key role in the implementation, enforcement, and interpretation of the FCRA for more than 40 years and now shares many of these responsibilities with the Consumer Financial Protection Bureau …
  • WASHINGTON (9/17/12)--The U.S. Small Business Administration (SBA) and AARP will partner Oct. 2 to host the first National Encore Entrepreneur Mentor Day.  The event is targeted at entrepreneurs over age 50 to match "encore entrepreneurs" with successful business owners and community leaders for advice and assistance. National Encore Entrepreneur Mentor Day is part of a larger effort by SBA and AARP to promote entrepreneurship among individuals ages 50 and older. It will consist of events that will include speed mentoring allowing mentors and entrepreneurs to share information for five-minute sessions, and mentor lunches …

CUNA backs FHFA eminent domain concerns

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WASHINGTON (9/14/12)--The Credit Union National Association (CUNA) said it supports the Federal Housing Finance Agency's (FHFA) opposition to the proposed use of eminent domain to speed some mortgage refinances.

Last month, the FHFA said it would consider taking action against municipalities that used eminent domain to revise mortgage loans. The agency did not say which actions it would take, but sought public comment on the issue in a Federal Register release.

The agency release followed the June announcement that California's San Bernardino County and two of its city governments, Fontana and Ontario, could move to use their eminent domain powers to seize mortgage loans from private investors.

The FHFA expressed concern that losses resulting from such programs would ultimately be paid for by taxpayers. "FHFA has determined that action may be necessary on its part as conservator for the enterprises and as regulator for the banks to avoid a risk to safe and sound operations and to avoid taxpayer expense," the agency wrote, adding that such actions could "negatively affect the extension of credit to borrowers seeking to become homeowners and on investors that support the housing market."

In a comment letter to the FHFA, CUNA Deputy General Counsel Mary Dunn said CUNA has serious concerns about the use of eminent domain as a means to achieve relief for distressed home mortgage borrowers. CUNA does not believe this use of eminent domain "would provide the level of relief to affected homeowners, communities, and securitizers that some have predicted."

CUNA also noted that the proposed use of eminent domain would likely be challenged in court. This outcome could create issues for affected homeowners, as courts could struggle, perhaps for years, with issues created by the proposal. One such issue would be how to value the loans and properties involved so that 'just compensation' may be provided to homeowners whose homes have been seized by the government.

For the full CUNA comment letter, use the resource link.

Fall Hikes kick off amid MBL press

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WASHINGTON (9/14/12)--While members of Congress will only be in Washington for a short time before they recess ahead of this fall's elections, the Credit Union National Association (CUNA), leagues and credit unions from several states will use this limited time to push for credit union priorities in Hike the Hill meetings.

Representatives from the League of Southeastern Credit Unions (LSCU), the Northwestern Credit Union Association, the Utah Credit Union Association, the Nebraska Credit Union League, the South Carolina Credit Union League and the West Virginia Credit Union League started the fall Hike the Hill season when they arrived in Washington this week. These leagues, along with credit union representatives from their respective states, held a mixture of in-office meetings with members of Congress and their staff, and informal receptions, to spread the credit union message.

The credit union groups were scheduled to meet with House and Senate members from their respective states, including House Financial Services Committee Chairman Spencer Bachus (R-Ala.) and Sens. Joe Manchin (D-W. Va.), Ron Wyden (D-Ore.), and Marco Rubio (R-Fla.).

Julie Renderos, CFO of Suncoast Schools FCU, Tampa, Fla., traveled to Washington with the LSCU group. Renderos said this type of direct advocacy on behalf of credit unions and members is of the utmost importance. "I can't state enough how each time we visit with our lawmakers we are keeping our issues on the front burner. We know that our elected officials truly want to hear from their constituents and because of this I will always take the time to come to Washington and meet with our members of Congress," she said.

Renderos and her fellow hill hikers are seeking congressional support for member business lending (MBL) cap increase legislation, enhanced supplemental capital access, ATM fee disclosure fixes and other credit union priorities during their visits.

MBL cap increase legislation has been introduced in both chambers of Congress, and a Senate vote on MBL legislation has been promised. CUNA has estimated that lifting the MBL cap to 27.5% of assets, from 12.25%, would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment. Both benefits come at no cost to taxpayers.

The help an MBL cap increase could provide to a still recovering economy was highlighted at a Wednesday Capitol Hill event. The event, which was organized by CUNA and Washington political newspaper The Hill, featured MBL praise from House and Senate sponsors, Washington think tanks, credit unions, and small business owners. (See related Sept. 12 News Now story: Small biz, lawmakers underscore need for more CU biz credit at Hill event)

Credit union groups from Idaho, Kentucky, Vermont, Minnesota, Georgia, North Dakota and South Dakota are scheduled to visit Washington this month, and more visits are being planned for later in the fall.

For more on the Hike the Hill efforts, use the resource link.

NCUA agenda potentially positive for CUs

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ALEXANDRIA, Va. (9/14/12)--The National Credit Union Administration's (NCUA) September open meeting agenda, which was unveiled Thursday, "covers only items that are potentially positive for credit unions… as opposed to those that will impose undue burdens and create barriers for credit unions that divert their resources from member service," Credit Union National Association Deputy General Counsel Mary Dunn said.

Items on the open agenda include:

  • A proposed rule addressing regulatory relief for small credit unions;
  • A proposed rule that would permit credit unions to invest in Treasury Inflation Protected Securities;
  • A proposed rule that would expand the agency's definition of "rural district" for fields of membership; and
  • An Advanced Notice of Proposed Rulemaking related to payday-alternative loan regulations.
The NCUA in September of 2010 moved to allow federal credit unions to offer short-term, small amount loans to their members. The loans, which serve as alternatives to payday loans that are offered by other financial service providers, come with certain restrictions. Federal credit unions may charge an interest rate that is a maximum of 10 percentage points above the established usury ceiling at that time. A $20 application fee may also be charged. The loans may total as high as $1,000 and may last for as long as six months, and the loans cannot be rolled over.

The open board meeting is scheduled to begin at 10 a.m. ET on Sept. 20.

A closed board meeting will take place before the open meeting at 8:30 a.m. ET. Creditor claim appeals and personnel issues will be on the agenda for the closed meeting.

For the full NCUA agenda, use the resource link.

Dodd-Frank could mean mortgage costs for CUs GAO

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WASHINGTON (9/14/12)--While the majority of the Dodd-Frank Wall Street Reform Act's regulatory changes is aimed at large, complex financial institutions, portions of the act addressing mortgage reforms "may impose additional requirements and, thus, costs" on credit unions and other financial institutions, the U.S. Government Accountability Office (GAO) has said.

The impact of these mortgage reforms, though, depends on the results of future rulemakings, the GAO said. The GAO report, entitled "Community Banks and Credit Unions: Impact of the Dodd-Frank Act Depends Largely on Future Rule Makings," found that finance industry representatives are particularly concerned that Dodd-Frank regulatory changes imposed by the Consumer Financial Protection Bureau (CFPB) may force firms to exit certain lines of business.

The GAO report was compiled through data analysis, study reviews and interviews with credit unions, banks and state and federal regulators.

The additional time, resources, and effort it would take their institutions to address new regulatory requirements was a chief concern. Some also said the standardization of processes through CFPB regulations could reduce the ability of community banks and credit unions to offer differentiated products to better serve their communities.

The GAO noted that some regulators and industry representatives expected the potential cumulative effect of CFPB mortgage reforms to decrease lending practices. The mortgage reforms could also reduce community banks' and credit unions' advantages in rural communities and other niche markets.

However, some of these regulatory burdens could be relieved if the CFPB used its full exemption authority, the GAO said. In addition, several Dodd-Frank provisions, including deposit insurance reforms, Sarbanes-Oxley Act exemptions, and the CFPB's pending supervision of nonbanks, "could reduce costs and/or help level the playing field for community banks and credit unions," the GAO said.

Overall, the report noted, "it is too soon to determine the Dodd-Frank Act's overall impact on small business lending," as much of the work asked of the CFPB and other regulators has not been completed.

The CFPB and the National Credit Union Administration generally agreed with the report, the GAO said.

For more on the report, use the resource link.

Inside Washington (09/13/2012)

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  • WASHINGTON (9/14/12)--The Securities and Exchange Commission (SEC) pledged to continue its pursuit of a civil fraud case against IndyMac and ex-CEO Michael W. Perry after a judge upheld his own decision to pare down the government's charges. U.S. District Judge Manuel Real of California's Central District ruled Monday that IndyMac did not mislead investors when the bank failed to disclose a supplemental ratio for weighting subprime assets that it had previously reported to the Office of Thrift Supervision (OTS) (American Banker Sept. 13). Perry maintained that because the bank was well-capitalized, the OTS did not require IndyMac to provide the unfavorable ratio. Real's decision reaffirms a similar ruling he made in July. In May, the court dismissed several of the government's claims against Perry and ruled he would not have to return any gains that were allegedly unlawful. SEC spokesman John Nester said in a statement Tuesday the agency will consider its options regarding the portion of the case that was dismissed and continue to pursue its case against Perry, who the SEC accuses of backdating the capital contribution to make the bank appear to be well-capitalized …
  • WASHINGTON (9/14/12)--A bipartisan bill that would require independent government agencies, including the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the Securities and Exchange Commission and the Commodity Futures Trading Commission, to analyze the costs and benefits of new regulations and tailor new rules to minimize unnecessary burdens on the economy, could be gaining support in the Senate. (American Banker Sept. 12) The bill, which was introduced by Sens. Rob Portman (R-Ohio), Mark Warner (D-Va.) and Susan Collins (R-Me.) in August, would give the executive branch some authority over the activities of independent regulators. The bill is being considered by the Homeland Security and Governmental Affairs Committee, but has not received a hearing
  • WASHINGTON (9/14/12)--The Financial Crimes Enforcement Network--or FinCEN--has made public a summary of it July 31 public hearing on an advance notice of proposed rulemaking (ANPR) on customer due diligence requirements for financial institutions. The ANPR was published in the Federal Register on March 5 and the July session on its requirements was one of what FinCEN has said will be a series of public hearings. The general summary of the meeting also includes prepared remarks from the hearing. Interested individuals may also view a portion of the hearing in a recorded webcast. …

Bachus urges Senate to move on ATM bill

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WASHINGTON (9/14/12)--The U.S. House unanimously passed a bill that could "stem the tide of baseless, nuisance lawsuits that threaten consumers' access to automated teller machines (ATMs)" in July and now it is time for the Senate to approve the legislation, according to House Financial Services Committee Chairman Spencer Bachus (R-Ala.).

In a Sept. 12 letter to Senate Majority Leader Harry Reid (D-Nev.), Bachus wrote, "By taking up and passing H.R. 4367, the Senate would help eliminate the requirement that ATM operators affix unnecessary and outmoded fee notices to their machines."

H.R. 4367 would eliminate portions of Regulation E that require credit unions and other financial institutions that provide ATM services to display a physical notice on the ATM that a fee will be charged. Under the legislation, ATMs would only be required to display the ATM disclosures on a screen.

The current, duplicative ATM disclosure requirements are creating issues for credit unions and other financial institutions. In some cases, the Credit Union National Association (CUNA) has noted, outside notices on ATMs are being intentionally removed or destroyed, without the financial institution's knowledge, and then pictures are taken of the ATM to show noncompliance with disclosure rules.

Some ATM users have filed lawsuits using such photos as evidence of apparent noncompliance. CUNA has said the number of these lawsuits could be in the hundreds and many credit unions are settling the suits to avoid the cost of litigation.

In urging his colleagues in the Senate to approve the bill, Bachus noted that interests as diverse as convenience stores, community banks, credit unions, casinos and gas stations support the bill's passage.

"In fact, there is no meaningful opposition to the bill," the House chairman concluded.

CUNA has also urged the Senate to approve the ATM bill soon.

Small biz lawmakers underscore need for more CU biz credit at Hill event

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WASHINGTON (9/13/12)--A Credit Union National Association (CUNA)-sponsored Capitol Hill event Wednesday focusing on the timeliness of adopting credit union business lending legislation was live-streamed on the internet, bringing the urgency of the legislation into the offices of House and Senate members, as well as headquarters of credit unions and leagues across the country.

Click for slide show At left, Sen. Mark Udall (D-Colo.), who is chief sponsor of a Senate bill to increase credit union member business lending (MBL), is greeted by CUNA President/CEO Bill Cheney (right) as he arrives at a Wednesday press event on Capitol Hill to shine a spotlight on the benefits an MBL cap increase would provide small businesses and the economy at large. (CUNA Photo)
The sponsors of Senate and House legislation to give credit unions more business lending authority--Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.)--made special appearances at the event, which drew nearly 200 credit union and small business supporters, as well as members of congressional staff. The event also included panels of small business advocates, credit unions and small business owners.

Presented by the Washington-based publication The Hill, the event was designed to highlight House and Senate legislation that would increase the credit union member business lending (MBL) cap to 27.5% of assets, from 12.25%. Members of both parties support the MBL cap increase bills, and H.R. 1418 has 140 cosponsors. S. 2231 has 21 cosponsors, and Senate leadership remains committed to a floor vote on the MBL legislation.

Speaking first, Udall said that the restriction on credit union business lending is a "regulation that we ought to lift."

"When credit unions have this additional capacity to lend to small businesses, it's a no-cost, sure-fire way to grow our economy," Udall said. "Simply put: There are credit unions with money to lend, and small businesses in many communities that need loans to spur job growth -- why don't we get government out of the way and let our economy grow?"

Noting the large group of credit union business lending supporters assembled at the briefing, Royce said he was delighted at the strong turnout of nearly 200. "It reflects the interest in what we can do to help small business in the United States; this is where we should start," he said.

Cheney noted that increasing the MBL cap for credit unions is one of the few issues that can bring divergent groups together in the partisan atmosphere of Washington. The economy desperately needs every reasonable chance it can get to help create new jobs, and the time is now for Congress to pass legislation giving credit unions more authority to make business loans, Cheney added. "It comes down to this," Cheney said: "We know the economy needs to add jobs; we know small business needs greater access to credit; we know we have at least a partial solution at our fingertips. That is: Give credit unions more authority to make business loans."

In one of two panel discussions, Eli Lehrer of the R Street Institute said the two MBL cap increase bills are policy changes Congress needs to consider "seriously" and at the earliest possible date.

Panelists said they saw no clear reason to oppose an MBL cap increase, and while banks have claimed there is no demand for small business loans, John Arensmeyer, CEO of The Small Business Majority, said his own experience has shown universal demand for small business loans across the country.

A Small Business Majority survey discussed during the event found that around 60% of small business owners said it is harder now to get a loan than it was four years ago. Another 60% said they have had issues accessing loans to help them grow their businesses and hire more workers, and 52% of respondents said they have used credit cards, not small business loans, to help finance their businesses. Small business owners overwhelmingly backed increasing the MBL cap for credit unions, supporting that change by a 2 to 1 ratio, according to the survey.

Most small businesses need small chunks of capital, and that is where credit unions can step in, Arensmeyer said. There's no reason why businesses should not have access to as much credit as they need, from as many sources as possible, he added.

Lehrer noted that a large percentage of credit union small business loans go to specialized business sectors, such as taxi cab drivers and organic farmers, that may be overlooked or misunderstood by larger lenders.

While CUNA has estimated that the proposed MBL cap increase could inject $13 billion in funds into the economy, creating as many as 140,000 new jobs in the first year following enactment, Steve Pociask of the Competitive Enterprise Institute said the value of an MBL cap increase may be, in fact, undervalued. When people get these new jobs, they will spend what they earn, creating a multiplier effect throughout the economy. He also noted that many of these loans could go to small start-ups, helping spur new innovation in the economy.

Eric Blinderman, International Litigation Counsel, and owner of two New York, N.Y. restaurants, and Zachary Davis, owner of The Penny Ice Creamery in Santa Cruz, Calif., both emphatically supported increasing the MBL cap. Blinderman noted that the multiplier effect from increased business lending would have a broad impact, helping both his employees and the farms his restaurants work with.

Brad Green, CEO of Listerhill CU, Muscle Shoals, Ala., and Brooke Van Vleet, CEO of St. Helens Community FCU. St. Helens, Ore., also spoke on the second panel. Green said his credit union has been forced to deny loans to extremely qualified borrowers due to the MBL cap. Van Vleet said her credit union, which currently provides $56 million in funds to 200 MBL participants, is helping fund the local economy by supporting a broad range of businesses in an area with high unemployment. She said her credit union is grandfathered, and is not subject to the 12.25%-of-assets MBL cap, but would only have the authority to lend around $20 million if it were subject to the cap, cutting the credit union's portfolio in half.

CU reps among CFPB Consumer Advisory Board members

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WASHINGTON (9/13/12)--Two credit union representatives are among the 25 consumer experts from outside the federal government that the Consumer Financial Protection Bureau (CFPB) has appointed to form its new Consumer Advisory Board (CAB), which will provide advice to CFPB leadership on a consumer financial issues and emerging market trends.

In a Wednesday CFPB announcement, Bill Bynum, CEO of Hope Enterprise Corp. and Hope Community CU, Jackson, Miss., was named vice president of the CAB. Laura Castro de Cortes, vice president of alternative financial services for Centris FCU, Omaha, Neb., was also named as a member.

The Credit Union National Association is working with the leagues to reach out to the credit union officials who were chosen, and will report to credit unions on how the CAB and the CFPB's Credit Union Advisory Council will operate.

The CAB is comprised of 25 members with expertise in consumer protection, financial services, community development, fair lending, civil rights, and consumer financial products or services. The CFPB said members also represent depository institutions that primarily serve underserved communities, and communities that have been significantly impacted by higher-priced mortgage loans.

CAB members will serve staggered three-year terms.

The first meeting of the CAB is scheduled to take place on Sept. 27 and 28 in St. Louis, Mo., and the panel is scheduled to meet at least twice a year. The panel will discuss, advise and consult with the bureau of emerging consumer financial issues.

The CFPB also announced the names of the 15 members of its new Credit Union Advisory Council. They are:

  • Bernard Balsis, IEG FCU, Hawaii;
  • Rose Bartolomucci, Towpath CU, Ohio;
  • Gary Bell, Cooperative FCU, California;
  • John Buckley, Gerber FCU, Michigan;
  • Carla Decker, District Government Employees FCU, Washington, D.C.;
  • Ron Ehrenreich, Syracuse Cooperative FCU, New York;
  • Kevin Foster-Keddie, Washington State Employees CU, Washington;
  • Mitchell Klein, Police and Firemen FCU, Pennsylvania;
  • Lily Lo, Northeast Community FCU, California;
  • Maria Martinez, Border FCU, Texas;
  • Marcus Schaefer, Truliant FCU, North Carolina;
  • Camille Shillenn, Unified People's CU, Wyoming;
  • Helen Godfrey Smith, Shreveport FCU, Louisiana;
  • Gregg Stockdale, 1st Valley CU, California; and
  • David Wright, Services Center FCU, South Dakota.
The bureau also released the names of its Community Bank Advisory Council on Wednesday.

2013 GAC site launched by CUNA

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WASHINGTON (9/13/12)--Registration for the Credit Union National Association's (CUNA) 2013 Governmental Affairs Conference (GAC) is now open, as CUNA today officially launched the online homepage for the conference, gac.cuna.org.

CUNA President/CEO Bill Cheney said the 2013 GAC "is all about making an impact, advancing our legislative agenda and removing regulatory barriers so that credit unions can be our members' best financial partners."

The theme of the 2013 GAC, Powerful Cause, Positive Effect, reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day, he added. CUNA's GAC is the credit union movement's premier political event and its largest national conference, each year providing more than 4,000 credit union executives and board members an opportunity to hear influential leaders from Congress, presidential administrations and federal regulatory agencies.

GAC attendees will also have the chance to meet directly with their members of Congress here in Washington. "It is critical that we bring the power of our grassroots cause to the Hill and ensure a stronger future for credit unions," Cheney said.

Recognized as the key conference to attend for political impact, credit union networking and industry updates, the GAC also offers a wide array of educational breakout sessions, the industry's largest exhibitor showcase, guest/family programs to tour Washington's sights, and special entertainment including an opening concert and the closing Gala Reception and Dance.

Keynote and other speakers and session topics will be announced in the weeks to come. For more information, follow the @CUNAverse twitter hashtag #CUNAGAC.

To register, use the resource link.

Hundreds of CUs accept NCUA LICU designation

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ALEXANDRIA, Va. (9/13/12)--The number of credit unions with low-income designations has increased by 553 following recent National Credit Union Administration (NCUA) outreach efforts, the agency said on Wednesday.

The NCUA in August notified 1,003 credit unions, indicating they are eligible for the low-income credit union (LICU) designation. Notified credit unions were offered a streamlined LICU application process, and the 553 credit unions noted above accepted the NCUA designation.

The addition of these new LICUs brings the total number of LICUs to 1,740.

The LICU notification initiative was incorporated into a relief and recovery package for drought-stricken states announced at the White House in early August, and 260 of the credit unions that accepted their designation were headquartered in drought-impacted states.

The NCUA in a release said the new LICUs serve 5.9 million members and hold more than $49 billion in assets, combined. According to the NCUA, 80% of these new LICUs have less than $100 million in assets, and the median asset size of these new LICUs is $24.6 million.

Credit unions that did not respond to this NCUA notification may still accept the LICU designation. They will have 30 days to do so, the NCUA said.

The LICU designation brings benefits that include the ability to accept supplemental capital and an exemption from the member business lending cap under certain circumstances. LICU-designated credit unions are also eligible for Community Development Revolving Loan Fund grants and low-interest loans and may accept deposits from non-members.

Inside Washington (09/12/2012)

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  • WASHINGTON (9/13/12)--The Federal Housing Finance Agency (FHFA) Monday reclassified the struggling Seattle Federal Home Loan Bank as "adequately capitalized" (American Banker Sept. 12). With the reclassification, the Seattle Bank is eligible to repurchase up to $25 million of excess capital stock per quarter at par ($100 per share). The bank said it plans to make its initial excess stock repurchase before the end of the month. The bank was classified as "undercapitalized" by FHFA in November 2009. It is still prohibited from redeeming stock or paying a dividend without approval from the FHFA …
  • WASHINGTON (9/13/12)--U.S. regulators will select the first non-bank firms likely to be classified as potential risks to the financial system, according to sources with knowledge of the plans. The Financial Stability Oversight Council will request confidential data from up to five U.S. firms it deems as systemically important this month, according to the sources, who would not identify themselves because the plans are not public (Bloomberg Sept. 12). Regulators will scrutinize the data to decide whether the companies should be subject to Federal Reserve supervision, including stress tests, higher capital levels and tougher liquidity requirements. Treasury Secretary Timothy F. Geithner told the House Financial Services Committee in July that insurer American International Group Inc. (AIG) is among the firms the council is considering

NEW CU reps among CFPB consumer advisory board members

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WASHINGTON (9/12/12, updated 1:10 p.m. ET)--Two credit union representatives are among the 25 consumer experts from outside the federal government that the Consumer Financial Protection Bureau (CFPB) has appointed to form its new Consumer Advisory Board (CAB), which will provide advice to CFPB leadership on a consumer financial issues and emerging market trends.

In a CFPB announcement today, Bill Bynum, CEO of Hope Enterprise Corp. and Hope Community CU, Jackson, Miss., was named vice president of the CAB. Laura Castro de Cortes, vice president of alternative financial services for Centris FCU, Omaha, Neb., was also named as a member.

The CFPB also announced the names of the 15 members of its new Credit Union Advisory Council. They are:
  • Bernard Balsis, IEG FCU, Hawaii;
  • Rose Bartolomucci, Towpath CU, Ohio;
  • Gary Bell, Cooperative FCU, California;
  • John Buckley, Gerber FCU, Michigan;
  • Carla Decker, District Government Employees FCU, Washington, D.C.;
  • Ron Ehrenreich, Syracuse Cooperative FCU, New York;
  • Kevin Foster-Keddie, Washington State Employees CU, Washington;
  • Mitchell Klein, Police and Firemen FCU, Pennsylvania;
  • Lily Lo, Northeast Community FCU, California;
  • Maria Martinez, Border FCU, Texas;
  • Marcus Schaefer, Truliant FCU, North Carolina;
  • Camille Shillenn, Unified People's CU, Wyoming;
  • Helen Godfrey Smith, Shreveport FCU, Louisiana;
  • Gregg Stockdale, 1st Valley CU, California; and
  • David Wright, Services Center FCU, South Dakota.
The bureau also released the names of its Community Bank Advisory Council. Read tomorrow's News Now for more.

Senators introduce new version of HARP changes

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WASHINGTON (9/12/12)--Sens. Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) this week introduced The Responsible Homeowner Refinancing Act of 2012 (S. 3522), which would "remove the barriers preventing borrowers who are making their payments on time from refinancing their loans at the lowest rates possible."

The bill is similar to legislation introduced by Menendez in May.

Overall, the bill would make it easier for homeowners whose mortgages are backed up by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to refinance their home loans. The GSEs would be required to offer streamlined underwriting and associated representations and warranties to both new mortgage servicers and mortgage servicers that already work with the GSEs.

The Home Affordable Refinance Program (HARP), which was created to ease the refinancing process, requires lenders to distinguish between borrowers with more than 20% equity in their home and those with less than 20% equity. Owners with high-equity homes are often subject to increased fees.

Under S. 3522, appraisal costs and other fees charged to mortgage refinancing applicants would also be eliminated for all HARP applicants. The bill would eliminate employment and income verification requirements for applicants as well.

This bill would ensure that all GSE borrowers who are making their payments have the same access to simple, low-cost refinances, regardless of the level of equity they have in their home, and would allow lenders to offer a single, streamlined program to all GSE borrowers who have been paying their loans on time, the Senators said in a release.

Menendez in a release said the bill, if passed, would eliminate the red tape that can leave some homeowners "trapped in higher interest loans" and would "put money back into the pockets of middle class families and strengthen our economy."

Boxer noted that the legislation would help lessen the number of home foreclosures.

The Federal Housing Finance Agency (FHFA) last month reported that one of every three refinances through the GSEs were made through HARP, the highest percentage claimed by the program since its inception in April 2009.

The FHFA attributed the HARP volume increase to record-low mortgage rates, as well as enhancement instituted to the program last fall.  Those changes included removal of the loan-to-value (LTV) ceiling for borrowers who refinance into fixed-rate loans and fee reductions.

The senators in the release estimated that 13.5 million borrowers with GSE-backed loans could benefit by refinancing their loans through HARP.

Inside Washington (09/11/2012)

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  • WASHINGTON (9/12/12)--The Federal Deposit Insurance Corp. (FDIC) plans to release its community bank study by the end of the year, and the agency will continue its focus on community banks beyond this year, Acting FDIC Chairman Martin Gruenberg said Monday (American Banker Sept. 11). The FDIC said it would explore the evolution and challenges faced by community banks through three initiatives: regional roundtables with bankers and agency officials; research on the history and development of the community bank sector; and a review of its examination and rulemaking policies to find ways to improve the regulatory process for community banks. The outcome of those initiatives will form the basis of the FDIC's year-end findings. The FDIC hopes to make the operation of community banks simpler and more efficient for both bankers and examiners, Gruenberg said …
  • WASHINGTON (9/12/12)--The Federal Reserve announced the results of Monday's auction of $3 billion in 28-day term deposits through its Term Deposit Facility. Forty-six bids from 27 participants were submitted. The competitive amount tendered was $11,775 billion with more than $3 billion awarded. The non-competitive amount awarded totaled $40.1 million. The awarded deposits will settle on Sept. 13 and mature on Oct. 11 ...
  • WASHINGTON (9/12/12)--The Federal Housing Finance Agency (FHFA) has launched a new representation and warranty framework for conventional loans that are sold or delivered after Jan. 1, 2013. The framework will apply to loans that are delivered to Fannie Mae and Freddie Mac, and will "clarify lenders' repurchase exposure and liability on future deliveries," the FHFA said in a release

Exam issues addressed by new manual NCUA OIG

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ALEXANDRIA, Va. (9/12/12)--In an internal review requested by the U.S. Congress, the National Credit Union Administration's (NCUA) Office of the Inspector General found inconsistencies in how small credit union examination policies and procedures are implemented. However, the OIG noted, the NCUA's recently released National Supervision Policy Manual addresses these and other examination concerns.

The report, which was developed at the request of Senate Banking Committee Chairman Tim Johnson (D-S.D.), details the agency's examination and complaint processes for small credit unions.

Johnson in February asked the NCUA OIG and inspectors general at the U.S. Treasury, Federal Reserve, and the Federal Deposit Insurance Corp. to report on their examination processes for small credit unions and community banks.

The OIG interviewed or obtained documentation from the agency's Office of the Executive Director, Office of Examination and Insurance, Office of Consumer Protection, Office of General Counsel and regional offices as it compiled the report. NCUA policies and procedures were also reviewed by the OIG. The audit addressed examinations for natural-person credit unions with $1 billion or less in assets.

The OIG report found that the agency provides "clear standards and policies" for agency staff that examine small credit unions. The OIG report also found that the NCUA has "a robust appeals process which allows credit unions to question examination results."

However, the NCUA report noted some inconsistencies in how these examination policies are implemented. The report also found some organizational issues related to regional determinations, the NCUA's Supervisory Review Committee, and the NCUA's internal ombudsman position.

The examination inconsistencies are likely a result of the NCUA's structure, which consists of five separate regional offices, each with their own supervisory manuals, the OIG said. This may have contributed to the Senate committee's perception that nationally, examiners conducted examinations with "inconsistent application of agency policies and procedures," the report noted.

The OIG did not recommend any changes to the NCUA's examination regime, noting that the new standardized examination manual would likely address any examination inconsistencies. However, the OIG did recommend some changes to how the NCUA communicates internally and tracks the status of ongoing examinations, and the agency agreed with these recommendations.

The new manual, according to the NCUA, will help ensure that credit unions are treated more consistently from region to region. The manual is an attempt to remove regional differences in quality control.

The Credit Union National Association earlier this year said that while examination consistency can be positive, the goal is to have examiners treat credit unions in a consistently professional manner, allowing the credit unions to develop and implement their own solutions to address problems.

For the full OIG report, use the resource link.

FinCEN sets BSA SAR webinars

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WASHINGTON (9/12/12)--Bank Secrecy Act (BSA), Currency Transaction Report (CTR), Designation of Exempt Person (DOEP) and Suspicious Activity Report (SAR) filing tips will be discussed at a pair of upcoming Financial Crimes Enforcement Network (FinCEN) webinars.

The first FinCEN webinar is scheduled to begin at 1 p.m. ET on Sept. 18 and will address BSA and SAR filing. FinCEN staff will also review frequently asked questions about the new SAR forms during the webinar.

The second FinCEN webinar, which is scheduled to begin at 1 p.m. ET on Oct. 2, will also address the BSA E-filing process. CTR and DOEP filing will also be discussed during the webinar.

FinCEN in 2011 approved a series of technical SAR and CTR changes. The form changes were made to ease the transition from the current paper SAR form submission model to a newer electronic filing model, and the changes will take effect on March 31, 2013. FinCEN has said the switch to all-electronic filing would improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information.

For more on the webinars, use the resource link.

CUNA key lawmakers highlight MBLs in press conference

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WASHINGTON (9/12/12)--Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.) will join Credit Union National Association (CUNA) President/CEO Bill Cheney and other credit union member business lending (MBL) supporters at a 1:30 p.m. (ET) press event on the benefits an MBL cap increase could provide small businesses and the economy at large.

Cheney said CUNA organized today's forum "to highlight the urgency of passing MBL legislation before the year is out."

Credit unions will be able to watch the press event streamed live by going to www.thehill.com. The event, which also will be open to congressional staff, is part of Washington political newspaper The Hill's "Issue Forum" series.

During the event, John Arensmeyer of The Small Business Majority and Eli Lehrer of the R Street Institute will present a joint research report focusing on job growth, the role small business plays in the economy and the support that credit unions can offer to small business in the economy's recovery with expanded business lending authority.

Bills that would increase the MBL cap to 27.5% of assets, from 12.25%, have been introduced in the House and Senate. Members of both parties support the MBL cap increase bills, and H.R. 1418 has 140 cosponsors. S. 2231 has 21 cosponsors, and Senate leadership remains committed to a floor vote on the MBL legislation. Udall and Royce are sponsors of the bills in their respective chambers.

CUNA has estimated that an MBL cap increase would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment. Both benefits would come at no cost to taxpayers.

FinCEN gives law enforcement new data access tool

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WASHINGTON (9/11/12)--FinCEN Query, an application that will allow law enforcement and regulatory officials to access and analyze 11 years of data, has been released by the Financial Crimes Enforcement Network (FinCEN).

Portions of the USA Patriot Act aimed to strengthen the government's ability to prevent, detect and prosecute international financial crimes and terrorist financing. That bill was passed in early 2002.

For the full FinCEN release, use the resource link.

Inside Washington (09/10/2012)

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  • WASHINGTON (9/11/12)--The Federal Deposit Insurance Corp. has recently moderated the number of consent orders it issues to banks. The agency handed out four consent orders in July after issuing three in June (American Banker Sept. 10). As many as a third of the nation's banks have received some sort of formal consent order since the beginning banking crisis in 2008, limiting the number of institutions that can be targeted. Fewer consent orders indicate the continued recovery of the industry, Serena Owens, the associate director for the division of risk management and supervision at the FDIC, wrote in an e-mail. The economy has largely stabilized since 2008, said Walter Moeling IV, a partner at Bryan Cave. Banks that received the most recent orders were cited because their classified assets ratio hit a 100% of Tier 1 capital and loan-loss allowance, Moeling said …
  • WASHINGTON (9/11/12)--The meeting of the Community Development Financial Institutions  (CDFI) Fund's Community Development Advisory Board, originally scheduled to be held at 2 p.m. ET Wednesday, has been postponed. When a new date for the meeting has been set, a meeting notice will be published in the Federal Register and the CDFI Fund will distribute the public notice via its e-mail subscription service

CUNA MBL press event leads way as Congress returns

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WASHINGTON (9/11/12)--As members of the U.S. Congress return to Washington this week, the Credit Union National Association (CUNA) will detail how member business lending (MBL) legislation will help small businesses and create new jobs during a Wednesday public press event.

The press event, which will be presented as part of Washington political newspaper The Hill's "Issue Forum" series, is scheduled to begin at 1:30 p.m. ET. Credit unions will be able to watch the event streamed live by going to www.thehill.com .

The event will feature remarks from key MBL sponsors Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.), as well as CUNA President/CEO Bill Cheney and MBL coalition partners. Rhett Buttle of The Small Business Majority and Eli Lehrer of the R Street Institute will also present a joint research report focusing on job growth, the role small business plays in the economy and the support that credit unions can offer to small business in the economy's recovery with expanded business lending authority.

MBL legislation was a key CUNA priority before the August congressional district work period, and it remains so as Congress returns.

Senate Majority Leader Harry Reid (D-Nev.) has promised a vote on MBL legislation before the end of the year, and CUNA and credit unions have continued to meet with legislators in anticipation of that vote. Credit union representatives from Alabama, Florida, Oregon, South Carolina, Utah, Washington and West Virginia will make the case for MBLs and other credit union priorities in visits to Washington this week.

"Every day, we have more confidence in our ability to win an up-or-down vote on MBL legislation, and CUNA is exploring every opportunity to advance this legislation before the end of the year," CUNA Senior Vice President of Legislative Affairs Ryan Donovan said.

Another credit union legislative issue, a bill that would ease dual ATM disclosure regulations that are creating legal issues for credit unions and other financial institutions, passed the U.S. House in July. However, that bill is being held up in the Senate. The issue is not the ATM bill itself, but legislation that it has been attached to in the Senate. The ATM legislation has been combined with a Consumer Financial Protection Bureau (CFPB) information disclosure bill, and political gridlock regarding the CFPB is creating issues for this bill. Donovan said CUNA "supports moving the ATM bill as quickly as possible--whether it is combined with the CFPB bill or on its own." CUNA has been working to resolve the situation, and believes the ATM bill, which has more than 60 co-sponsors, "could move quickly if it was put forward as a stand-alone measure," Donovan added.

This week, the returning House and Senate members have several hearings on the schedule.

Using direct deposit to receive social security benefits will be discussed in a House Ways and Means social security subcommittee hearing today. The House Financial Services Committee hearing today will also mark up legislation that would clarify municipal advisor regulations under the Securities Exchange Act, and separate legislation that would reform housing support for military veterans.

The Senate Banking Committee on Wednesday plans to discuss the CFPB's semi-annual report to congress with CFPB Director Richard Cordray. A Wednesday joint hearing on The JOBS Act has also been scheduled by the House Oversight and Government Reform TARP, financial services and bailouts of public and private programs subcommittee and the House Financial Services capital markets and government sponsored enterprises subcommittee. A Wednesday House Financial Services financial institutions and consumer credit subcommittee hearing on the use of consumer credit data has also been scheduled.

Congress is scheduled to remain in session until Sept. 21.

CU performance LICU eligibility more on NCUA webinar agenda

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ALEXANDRIA, Va. (9/11/12)--Corporate credit unions, recently finalized and proposed rules, and the overall performance of the credit union industry will all be topics of conversation when the National Credit Union Administration (NCUA) hosts its next online town hall webinar on Oct. 4.

The webinar is scheduled to begin at 3 p.m. ET and will be hosted by NCUA Chairman Debbie Matz. The webinar is free of charge and is open to all in the credit union industry.

"Because credit unions can't always come to NCUA, NCUA comes to them with webinars," Matz said. The online town hall events provide timely information about NCUA initiatives and continue an open dialogue with credit union stakeholders, she added. "Our industry is going through many changes, and credit unions need to know about the latest developments at NCUA. I hope credit union professionals and volunteers will join us to hear what's going on and ask questions," Matz said.

The webinar will also include discussion of the NCUA's low-income credit union eligibility and regulatory modernization initiatives, and the agency's new Office of National Examinations and Supervision.

To register for the webinar, use the resource link.

Long compliance period needed for mortgage form changes CUNA

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WASHINGTON (9/11/12)--Noting that credit unions and financial institutions of all sizes will have issues implementing planned changes to Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures, and related mortgage rules, the Credit Union National Association (CUNA) has encouraged the Consumer Financial Protection Bureau (CFPB) to give financial institutions one year, at a minimum, to comply.

The CFPB earlier this year proposed a new, simplified mortgage disclosure form that combines elements of RESPA and TILA disclosure forms into a single document. New mortgage rules were also proposed to implement these RESPA/TILA changes.

Final versions of the forms and rules are expected to be released in January, but the agency has not settled on final implementation dates.

Staff training and software and system alterations are among the challenges that credit unions and others will face due to these TILA/RESPA changes, and CUNA in a comment letter to the CFPB noted that the agency has admitted that "compliance with the new rules and combined disclosure requirements will be a challenge for a number of institutions." CUNA also noted that easing compliance dates for smaller institutions may not achieve the intended result of relieving burdens for small institutions. For example, CUNA said that many larger institutions purchase loans from smaller institutions. Even if regulatory effective dates are delayed for smaller institutions, larger institutions may require the smaller ones to issue disclosures that are consistent with the regulation, CUNA added.

"This issue would be resolved if all institutions were subject to the same, delayed effective date," CUNA Deputy General Counsel Mary Dunn said in the comment letter. She suggested the CFPB grant financial institutions with more than $10 billion in assets a minimum of 12 months to comply with the new rules, and said the agency should add an additional six months of compliance time for institutions with less than $10 billion in assets.

CUNA also agreed with the CFPB's plans to delay Title XIV disclosures to coincide with the adoption of the combined TILA-RESPA disclosures.

The provisions that the CFPB is proposing to delay are:

  • Warning regarding negative amortization features;
  • Disclosure of state law anti-deficiency protections;
  • Disclosure regarding creditor's partial payment policy;
  • Disclosure regarding mandatory escrow accounts;
  • Disclosure regarding waiver of escrow at consummation;
  • Disclosure of monthly payment, including escrow, at initial and fully-indexed rate for variable-rate transactions;
  • Repayment analysis disclosure to include amount of escrow payments for taxes and insurance;
  • Disclosure of settlement charges and fees and the approximate amount of the wholesale rate of funds;
  • Disclosure of mortgage originator fees;
  • Disclosure of total interest as a percentage of principal; and
  • Optional disclosure of appraisal management company fee.
"With the exception of certain fixed-rate, lump sum reverse mortgages, we believe that creditors should be given an additional period of at least six months for compliance with requirements that apply to open-end and other transactions," CUNA said.

Overall, CUNA urged the CFPB to use its exemption authority "to the fullest extent permissible to relieve regulatory burdens for credit unions."

For the full CUNA comment letter, use the resource link.

CUNA comments on CFPB counseling proposal

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WASHINGTON (9/10/12)--The Credit Union National Association (CUNA) in a comment letter urged the Consumer Financial Protection Bureau  (CFPB) to expand some portions of pending mortgage regulations that address home purchase counseling.

The CFPB in July released proposed amendments to Regulation Z, Truth in Lending Act (TILA), and Regulation X, Real Estate Settlement Procedures Act (RESPA), that would combine certain home mortgage disclosures.

The mortgage proposal would apply to the majority of consumer mortgages, but would not apply to home equity lines of credit, reverse mortgages, or mortgages that are secured by mobile homes or dwellings that are not attached to land. Creditors that process five or fewer mortgages per year would also not be subject to the rules.

One part of the proposal would require lenders to provide mortgage loan applicants with a list of five home ownership counselors or counseling groups, subject to certain requirements. CUNA in the comment letter said it supports efforts to empower consumers, but suggested the CFPB reduce the number of counselors that a financial institution is required to provide. CUNA also said the CFPB should provide greater flexibility regarding when this list must be provided to borrowers. The CFPB under the proposal would require the list to be delivered no later than three business days after a financial institution receives a borrower's loan application.

Overall, CUNA encouraged the CFPB to consider the burden faced by credit unions as it finalizes these and other mortgage regulations, and suggested the CFPB give financial institutions between one year and 18 months to comply with the pending regulatory changes.

CUNA also is developing separate comment letters on other aspects of the CFPB mortgage proposal.  Those comments will be submitted to the agency in the weeks and months ahead.

The CFPB last week extended the comment period for portions of the mortgage proposals that address the definition of "finance charge" as it relates to mortgage loans and the agency's high-cost mortgage coverage test under the Home Owners Equity Protection Act until Nov. 6.

Comments on proposed changes to loan estimate and closing disclosure form requirements, as well as other aspects of the mortgage proposal, will also be accepted until that date.

For the full CUNA comment letter, use the resource link.

Inside Washington (09/07/2012)

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  • WASHINGTON (9/10/12)--As part of its ongoing efforts to wind down and recover its remaining Capital Purchase Program (CPP) investments under the Troubled Asset Relief Program (TARP), the U.S. Department of the Treasury Thursday announced it will sell preferred stock CPP investments in four banks. Treasury will conduct auctions for its preferred stock positions in Alpine Banks of Colorado, Glenwood Springs, Colo.; First Community Financial Partners Inc., Joliet, Ill.; F&M Financial Corp. , Clarksville, Tenn.; F&M Financial Corp., Salisbury, N.C; and Yadkin Valley Financial Corp., Elkin, N.C. Treasury said it expects to begin the auctions today …
  • WASHINGTON (9/10/12)--The Federal Reserve has introduced a magazine and website (http://www.communitybankingconnections.com/subscribe.cfm) dedicated to community banking issues. The quarterly magazine, Community Banking Connections, was created by the Fed to improve communication between the Federal Reserve and community bankers," according to a message from Federal Reserve Chairman Ben Bernanke. "We also hope it will inform and clarify expectations and give a better sense of the Federal Reserve's perspectives on supervisory matters," Bernanke said. "It is critical to keep the communications channels open if supervisors and banks are to work together constructively." The website also features compliance and policy guidance and a comments section …

Early voting begins well ahead of election day CUNA reminds

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WASHINGTON (9/10/12)--Campaigns nationwide are ramping up their operations ahead of this year's official election day, Nov. 6, but Credit Union National Association (CUNA) Vice President of Political Affairs Trey Hawkins noted that early voting has already begun in some states.

Absentee ballots were issued in North Carolina on Friday. Ballots for 31 other states and the District of Columbia will be issued ahead of Nov. 6. Early voting is allowed as late as the Friday before Nov. 6 in some states. Early and absentee voters may submit their ballots through the mail, and, in some cases, may vote in person at an election official's office or other remote voting locations.

Early ballots are counted as soon as Sept. 21 in South Dakota, and the schedules of other states are staggered between late September and early November.

Approximately 30%, or 39.7 million of 2008's presidential election votes, were cast by early and absentee ballots, according to George Mason University's U.S. Elections Project statistics. George Mason Professor  Michael McDonald predicted that absentee and early ballots could account for 35% of 2012's votes in a Friday Huffington Post blog post.

According to CUNA estimates, over 42% of all registered voters belong to a credit union. "If credit unions don't vote, we cannot expect our voice to be heard on Capitol Hill or in the state house," Hawkins said.

CUNA has provided information for voters and an online tool to help them determine where they can apply for early voting applications, on cuna.org. For the CUNA elections website, use the resource link.

CUs can view Wed. CUNA press event on MBLs

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WASHINGTON (9/10/12)--A Wednesday press event in Washington highlighting how member business lending (MBL) legislation will help small businesses and create new jobs--and featuring key U.S. Senate and House supporters--will be streamed across the Internet so that congressional offices and credit unions can watch. The event gets underway at 1:30 p.m. ET.

The event, which will feature remarks from key MBL sponsors Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.), as well as Credit Union National Association (CUNA) President/CEO Bill Cheney and MBL coalition partners, comes as members of Congress return to Washington this week. Washington political newspaper The Hill is presenting the MBL event as part of its "Issue Forum" series, and representatives from the paper will moderate presentations about the MBL legislation and what it could mean to small businesses in need of capital.

As part of the program, Rhett Buttle, of The Small Business Majority, and Eli Lehrer, of the R Street Institute--both respected leaders of their respective Washington think tanks--will also present a joint research report focusing on job growth, the role small business plays in the economy and the support that credit unions can offer to small business in the economy's recovery with expanded business lending authority. Credit union and small business representatives will also speak.

The event will be live streamed online, and will be available to the credit union community, members of Congress and their staff. To watch the event on Wednesday, go to thehill.com and follow the instructions. The event will be held in room 50 of the Dirksen Senate Office Building.

"We believe this event will reinforce to Congress the urgency of enacting MBL legislation at a time when job creation continues to be a huge policy concern," said Cheney, pointing to last Friday's jobs report showing unemployment still above 8%.

"I urge credit unions to take advantage of the opportunity to view the event themselves via the live webcast," Cheney added. "The issues forum will drive home the point that credit unions have a long and successful track record of small business lending, but some of the credit unions that have been most successful are being forced to curb or stop lending because they are bumping up against the MBL cap. This type of forum is one way that CUNA, credit unions and our supporters in Washington can help draw attention to the boost an MBL cap increase could give the economy," he said.

Bills that would increase the MBL cap to 27.5% of assets, from 12.25%, have been introduced in the House and Senate. Members of both parties support the MBL cap increase bills, and H.R. 1418 has 140 cosponsors. S. 2231 has 21 cosponsors, and Senate leadership remains committed to a floor vote on the MBL legislation.

CUNA has estimated that an MBL cap increase would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment. Both benefits would come at no cost to taxpayers.

iCompBlog Wrap-Upi reports on CUNA lending school more

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WASHINGTON (9/10/12)--In the August edition of the Credit Union National Association's (CUNA) CompBlog Wrap-Up, CUNA Federal Compliance Counsel Colleen Kelly lays out the latest compliance tips from this summer's new CUNA Lending Compliance School, and provides details on the eight regulatory proposals that are currently out for public comment.

The CUNA Lending Compliance School, which was held in Las Vegas early last month, addressed, among other items:

  • The Equal Credit Opportunity Act;
  • The National Flood Insurance Program;
  • Decoding lending examinations;
  • The Real Estate Settlement Procedures Act;
  • Tips on fair lending compliance; and
  • The Home Mortgage Disclosure Act.
Credit union compliance experts from across the country gave their tips on how best to stay out of regulatory trouble, and some of their comments are covered in this month's Wrap-Up.

The latest edition of the Wrap-Up also offers a question and answer section on international remittances, and details on several NCUA letters about topics ranging from multi-featured lending plans to interest-rate risk.

As it does every month, the August CompBlog Wrap-Up lists the upcoming effective dates of new regulations, important compliance articles and reports to read, as well as CUNA training programs.

For more of the CUNA CompBlog Wrap-Up, and other compliance gems, use the resource links.

CFTC sets Sept. 12 swaps meeting

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WASHINGTON (9/7/12)--Proposed rules that would enhance customer protections and final rules that would adapt existing regulations to incorporate swaps are scheduled to be discussed at a Sept. 12 Commodity Futures Trading Commission (CFTC) open board meeting.

The meeting is scheduled to begin at 9:30 a.m. ET at CFTC headquarters in Washington.

The CFTC said the proposed rule would enhance protections that are afforded to customers and customer funds that are held by futures commission merchants and derivatives clearing organizations.

A broadcast of the meeting will be made available to the public through a webcast and a toll-free phone line.

The CFTC earlier this year finalized definitions of swaps, security-based swaps and security-based swap agreements, and these new swap definitions are in effect.

Under a recent CFTC proposal, credit unions and other co-ops with $10 billion or more in assets would avoid swap clearing requirements when loans that are originated for members are sold on to other entities. This exemption also would be extended to swap transactions that are used to hedge against risks associated with member loans.

The exemption would apply to cooperatives whose members are non-financial entities, financial entities to which the small financial institution exemption applies, and cooperatives. Credit unions and other financial institutions with under $10 billion in assets are already exempt under a separate CFTC proposal.

The exemptions would help minimize the additional costs and fees associated with mandatory clearing and provide flexibility for credit unions to use non-cleared swaps, Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn has said.

National Credit Union Administration regulations currently permit a limited number of federal credit unions to use certain derivatives, such as interest-rate swaps and caps, to hedge or reduce their interest-rate risks. Some state-chartered credit unions also have similar derivatives authority for risk management purposes. Relatively few credit unions use derivatives to hedge interest-rate risk.

September financial services schedule set

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Fyi: WASHINGTON (9/7/12)--Credit reporting issues, Consumer Financial Protection Bureau (CFPB) oversight and issues created by the Federal Reserve's interest rate setting practices will be among many topics of discussion when the House Financial Services Committee reconvenes next week.

The Democratic National Convention ended last night, and with that convention and the earlier Republican National Convention complete, legislators are scheduled to return to Washington. Their stay, however, will be a short one, with a weeklong congressional district work period scheduled to begin on Sept. 24.

The committee's September schedule includes:

  • A Sept. 13 House financial institutions and consumer credit subcommittee hearing on credit reporting agency issues;
  • A Sept. 20 full Financial Services Committee hearing to review CFPB Director Richard Cordray's semi-annual report to Congress;
  • A Sept. 20 House domestic monetary policy and technology subcommittee hearing on the monetary impact of interest rates and the consequences of interest-rate setting as a Federal Reserve monetary policy tool; and
  • A Sept. 13 House capital markets subcommittee/oversight and government reform subcommittee hearing on implementation of the Jumpstart Our Business Startups (JOBS) Act.
The committee has also set a Sept. 11 House subcommittee on insurance, housing and community opportunity hearing on the Terrorism Risk Insurance Act and a Sept. 14 House subcommittee on insurance, housing and community opportunity hearing about the barriers that homeless and low-income military veterans face when they attempt to secure government-funded housing assistance and services.

A Sept. 12 full committee markup session has also been scheduled, but the bill that will be marked up has not been specified yet.

For more on the House hearings, use the resource link.

A volunteer at DNC tells the CU story

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CHARLOTTE, N.C. (9/7/12)--Phillip Kridel has been hitting the streets of Charlotte before 3:30 a.m. each day this week to reach a job he doesn't even have to do. The credit union director has rolled up his sleeves as a Democratic National Convention volunteer, working to sort and assign credentials--the coveted passes that make the difference between getting in or being locked out of the convention events.

"We understand how important policy is to our future--as an individual credit union and as a movement," Kridel told News Now early this week. He said his long-term experience in his past as an employee of the U.S. Postal Service--35 years as a city letter carrier--opened his eyes to the importance of being aware of the policy issues that surround one's work life. He has carried that perspective forward into his credit union life.

Kridel has served as a voter registration volunteer in the past so as the convention volunteer opportunity came open in his home base of Charlotte, he stepped forward to get involved. He said more people offered to volunteer than there were spots to fill, despite the fact that the DNC had, he said, some 10,000 volunteer positions to fill.

At first he filled a couple of shifts at the credentials office, but since July 16 he has been serving five days a week and some weekend days for four- to five-hour shifts verifying and organizing and supervising delivery of credentials.

So, why do it, News Now asked. What's the personal benefit or the professional benefit to political volunteerism?

"For myself, I see it as making my own, very small contribution to the re-election of Barack Obama, which is important to me, personally, to my family, and to our future.

"For credit unions? The more we can tell our story to everybody--and I talk to everyone I can about credit unions, without making them crazy--the more people know about credit unions, the more people understand how important they are in the financial marketplace," Kridel explained.

He said as a convention volunteer he is working alongside people who "work for a living and need the best possible rates on loans and savings, and need not to be nickel-and-dimed" on financial services--and these are people, he says, who need to know about credit unions.

His mission, he adds, is particularly important here in Charlotte, where credit unions operate in the shadow of the Bank of America headquarters here.

CU boots keep moving in Charlotte

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CHARLOTTE, N.C. (9/7/12)--Even as the Democratic National Convention (DNC) prepared Thursday for its climatic event--when President Barack Obama took the stage last night to accept the party's nomination for president--credit unions stayed involved in convention activities to the end.

House Democratic Leader Nancy Pelosi (Calif.) poses with CUNA President/CEO Bill Cheney, left,  CUNA Vice President of Political Affairs Trey Hawkins, center, and CUNA Senior Vice President of Legislative Affairs Ryan Donovan, right. (CUNA Photo)
Credit Union National Association (CUNA) senior officials, including President/CEO Bill Cheney, continued to meet with high-level Democrats and discuss credit union issues. CUNA interactions included those with House Democratic Leader Nancy Pelosi of California, Sen. Mark Udall of Colorado, and Rep. James Clyburn of South Carolina, who is the third-ranking Democrat in the House and who participated in the ribbon cutting ceremony Wednesday of the credit union project that renovated a rooftop playground for young patients at Levine Children's Hospital.

CUNA and the leagues also interacted with, to name but a few, New York's Rep. Carolyn Maloney, of the Joint Economic Committee, Rep. Ed Perlmutter of Colorado, and Rep. Suzanne Bonomici of Oregon, who signed on to CUNA-backed legislation to increase the credit union member business lending cap as her first bill co-sponsorship when elected.

CUNA and the state leagues also met with a host of state legislators during the four-day convention.

Credit union participation in the national political conventions started in 1988.

"Our participation," says CUNA Vice President of Political Affairs Trey Hawkins, "is a dynamic way of keeping credit unions and the credit union philosophy of 'people helping people' in the national spotlight.

"The conventions are an opportunity to talk to and communicate with all of the policy and media and political elites in one place. That's an opportunity we want to take on behalf of credit unions."

Among the highlights of credit union involvement at the DNC, CUNA, the North Carolina Credit Union League, the South Carolina Credit Union League and other credit union representatives continued a tradition started in 2000 of leaving behind a charitable project for the host city when they participate in national political conventions.

With Clyburn participating, credit unions unveiled their community project at Levine Children's Hospital Wednesday. (Use resource link to read more.)

CUNA, the state credit union leagues, CUNA Mutual Group, and credit unions also honored all delegates this week, when hundreds of them, along with more than a dozen federal and state lawmakers, attended an event hosted at the Aria Tuscan Grill Restaurant.

CUNA has also been a sponsor of the National Journal's Convention Daily Briefings, which feature party newsmakers. Similar activities were held at last week's Republican National Convention in Tampa, Fla.

Inside Washington (09/06/2012)

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  • WASHINGTON (9/7/12)--During speeches at the Democratic National Convention Wednesday, Democrats rebutted Republican charges that President Barack Obama is stifling the economy through overregulation. Massachusetts Senate candidate Elizabeth Warren, who helped form the Consumer Financial Protection Bureau, shaped Obama administration's efforts to employ the reforms of the Dodd-Frank Act as a battle to clean up Wall Street and a fight for the middle class. "President Obama believes in a level playing field," Warren told DNC delegates and attendees. "He believes in a country where nobody gets a free ride or a golden parachute, a country where anyone who has a great idea and rolls up their sleeves has a chance to build a business, and anyone who works hard can build some security and raise a family." In her speech, California Attorney General Kamala Harris said rules are necessary to create a level playing field. "We've all seen what happens when you roll back those rules," Harris said. "What happens are rows of foreclosure signs. What happens are mountains of family debt. What happens is a middle class that's hurting" …

Audio conference to cover NCUA CFPB priorities

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WASHINGTON (9/7/12)--Recent National Credit Union Administration (NCUA) multi-featured lending (MFL) guidance, the Consumer Financial Protection Bureau's (CFPB) remittance transfer rule, and that agency's latest mortgage proposals will all be addressed during the Credit Union National Association's (CUNA) upcoming quarterly pressing compliance issues audio conference.

The 1.5 hour-long CUNA conference will begin at 2 p.m. ET on Sept. 11.

CUNA Senior Vice President for Compliance Kathy Thompson, Senior Compliance Counsel Mike McLain, Director of Compliance Information Valerie Moss, Federal Compliance Counsel Colleen Kelly and Senior Assistant General Counsel Jared Ihrig will host the conference. CUNA Mutual Group Director of Regulatory Compliance Bill Klewin will also discuss how the recent MFL guidance could impact that company's LOANLINER program.

The audio conference will also address:

  • The Financial Crime Enforcement Network's latest advisory on identifying and reporting suspicious activity related to mortgage fraud;
  • Changes that have been made as a result of a recent National Flood Insurance Program extension;
  • Servicemember Civil Relief Act developments; and
  • The NCUA's work regarding credit union risk exposure.
To register for the audio conference, use the resource link.

NCUA sues UBS over WesCorp USC losses

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ALEXANDRIA, Va. (9/7/12)--UBS Securities on Thursday joined the list of Wall Street firms that have been sued by the National Credit Union Administration (NCUA). The agency alleged that UBS violated federal and state securities laws when it sold securities to U.S. Central Corporate FCU and Western Corporate FCU that caused losses.

The NCUA's complaint, which was filed in Kansas federal district court, states that UBS sellers and underwriters made numerous material misrepresentations in the offering documents when that firm sold a combined $1.1 billion in securities to the two failed corporates.

These misrepresentations caused U.S. Central and WesCorp to believe the risks of loss associated with these investments were minimal, when in fact the risks were substantial, said NCUA.

"The strength of our entire financial system relies on trust and accountability," NCUA Board Chairman Debbie Matz said in a release. "As our complaint makes clear, UBS Securities violated this trust, which contributed to the collapse of two corporate credit unions and the resulting crisis in the credit union industry. NCUA has worked to restore stability to the credit union system. Now we intend to hold UBS Securities, as well as other responsible parties, accountable," she added.

For the full NCUA release, use the resource link.

The agency has also settled with Citigroup, Deutsche Bank Securities, and HSBC, avoiding the cost of litigation and bringing in more than $170 million in funds that were lost due to the corporate credit union investments. The NCUA has also filed five similar actions against J.P. Morgan Securities, RBS Securities, Goldman Sachs, and Wachovia, and each of these suits are progressing through the court system.

U.S. District Judge Richard D. Rogers of the U.S. District Court for the District of Kansas in late July gave the agency permission to move forward with a combined lawsuit against RBS Securities and Wachovia.

While elements of the NCUA's suit had been questioned by the defendants, the judge said the agency had met the statute of limitations requirement in filing the suit with an extension of time, called an "extender clause," and had provided enough evidence to make a "plausible" claim of misrepresentation by the banks regarding the risk of the securities bought by the corporates.

The certificates in question were offered and sold to U.S. Central in 2006 and 2007, more than three years before NCUA filed the lawsuit on June 20, 2011. The banks had argued that NCUA had not met the required statute of limitations, as the securities in question were sold to the corporates in 2006 and 2007. However, the judge said NCUA had not waited too late to file its suits. He also noted that the NCUA could not have known the specifics of the securities offered to the corporates until it took them under conservatorship. (See related July 27 News Now story: Court: NCUA's Wall St. bank suits can proceed)

The difference one CU can help make

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CHARLOTTE, N.C. (9/6/12)--Sula Pettibon and Winnie Kennedy sat on the newly renovated rooftop playground at Levine Children's Hospital Wednesday morning waiting for the ribbon cutting ceremony to officially open the play site. They wanted to witness the difference one credit union can make in the lives of people in their communities.

Pettibon, community relations manager and chairman of the employee fundraising committee, and Kennedy, lobby services director, both hail from Family Trust FCU, of Rock Hill, S.C.

Pettibon told News Now that they were at Levine because "credit unions are all about people helping people." She added, "Our employees raise money all year for charities."

She said deciding to get involved in the credit union project at Levine wasn't a tough decision. Although her credit union is based in South Carolina, Levine Children's Hospital is only about a half an hour's drive from Rock Hill, she said. It is a hospital that sick kids in her community would--and do--use.

In fact, she recalled, one of her credit union's senior staff investment officers has a son who was treated at Levine. Kennedy added another of the credit union's employees has a child with a heart condition who has been seen at Levine.

"It's a place that our Rock Hill community uses," Pettibon repeated.

The credit union employees said they were pleased with the outcome of the credit union effort at Levine. They also seemed pleased that they had an opportunity to discuss with Credit Union National Association (CUNA) President/CEO Bill Cheney credit union issues--like legislation to increase the credit union member business lending limit that is pending in both the U.S. House and Senate--as they all waited for a ribbon-cutting ceremony to begin to officially open the playground space.

Rep. Clyburn calls CUs convention project important

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CHARLOTTE, N.C. (9/6/12)--Rep. James Clyburn (D-S.C.), a top Democratic leader in the U.S. House and former House Majority Whip, commended credit unions Wednesday for their tradition since 2000 of leaving behind a charitable project for the host city when they participate in national political conventions, like the Democratic National Convention taking place in Charlotte, N.C., this week.

Click for slide show John McGrail, of the Caroline Credit Union Foundation, Martha Whitecotton, president/CEO of Levine Children's Hospital, Rep. James Clyburn (D-S.C.), who is the third ranking Democrat in the U.S. House, CUNA President/CEO Bill Cheney, Steve Fowler, president/CEO of the South Carolina Credit Union League, and John Radebaugh, president/ CEO of the North Carolina Credit Union League cut the ribbon to declare the renovated rooftop playground at Levine open for fun. (CUNA Photo)
Clyburn made his remarks when he was on hand at the Levine Children's Hospital for a ribbon cutting ceremony for a project made possible by the Credit Union National Association (CUNA), the North Carolina Credit Union League, the South Carolina Credit Union League, the National Journal Group, CUNA Mutual Group, CO-OP Financial Services and others who have been involved for months in renovating a rooftop playground at Levine to provide a stimulating and therapeutic environment for youngsters being treated there.

CUNA President/CEO Bill Cheney, welcoming Clyburn, noted that the playground project is emblematic of the credit union philosophy of "people helping people."

He noted that hundreds of man hours, as well as hundreds of thousands of dollars in charitable contributions, have been dedicated by credit unions in North and South Carolina and across the country in support of the project.

Clyburn called it "important" that credit unions have decided that when they participate in these conventions they should leave the community even better off than they found it. "Congratulations to you for doing this," he added.

Clyburn shared a personal story about the impact a project to help a children's hospital can have on a community. He noted his family's joy when, after raising his three, one daughter presented Clyburn and his wife with their first grandson. However, the child arrived three months premature and had three operations before he weighed even 10 pounds.

"Now he is a freshman in college," Clyburn said. He did not just survive, he thrived, the South Carolina Democrat declared.

Clyburn, who noted he is a member of two credit unions and his wife a member of a third, commended Levine Children's Hospital and credit unions for working together on the project to benefit young patients.

The Charlotte project, to honor the DNC held here this week, mirrors another sponsored by CUNA, state leagues, credit unions and their partners that was unveiled last week at All Children's Hospital to honor the Republican National Convention in Tampa, Fla.

The two 2012 projects cost a combined $600,000, and credit unions nationwide, as well as the Carolinas Credit Union Foundation and the League of Southeastern Credit Unions Foundation, have raised funds to cover the costs of the projects.

CUNA CUs honor delegates stay active at DNC

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CHARLOTTE, N.C. (9/6/12)--Between 250 and 300 Democratic National Convention (DNC) delegates and more than a dozen federal lawmakers Wednesday attended an event hosted by the Credit Union National Association, the state credit union leagues, CUNA Mutual Group, and credit unions to honor all delegates attending the convention.

DNC delegates and federal lawmakers attended an event hosted by CUNA, the credit union leagues and CUNA Mutual Group at the Aria Tuscan Grill Restaurant in uptown Charlotte, N.C., to honor all delegates attending the convention here. (CUNA Photo)
The event, hosted at Charlotte, N.C.'s Aria Tuscan Grill Restaurant, provided delegates, lawmakers and credit union representatives a casual atmosphere to mingle and discuss the events of the day, as well as credit union issues. It also gave them a chance to refuel with a wide assortment of tapas-style selections.

The delegate event closely followed another credit union convention highlight when CUNA and its partners unveiled a convention "leave-behind" project to benefit the DNC's host city.

After months of preparation and work, the credit union project now provides young patients at Levine Children's Hospital with a renovated rooftop playground for therapeutic play, a bit of fresh air, a change of scenery, and a break from their hospital routines. (See related story: Rep. Clyburn calls CUs' convention project 'important.')

Both credit union events happened just hours before former President Bill Clinton took the podium at the Time Warner Cable Arena last night to formally nominate Barack Obama as the Democratic candidate for president. The convention changes venue today to the much larger Bank of America Stadium for when the president delivers his acceptance speech.

Also on Wednesday, CUNA continued its ongoing sponsorship of the  National Journal's Convention Daily Briefings, which feature party newsmakers here, as it did in Tampa.

The day's session featured Rep. Chris Van Hollen (D-Md.), who discussed Republican vice presidential nominee Paul Ryan's budget plan and how Van Hollen thinks it has helped Democrats in House races across the county.

The session also included the executive directors of both the Democratic Senatorial Campaign Committee and Democratic Congressional Campaign Committee and ended with The Cook Political Report's Jennifer Duffy and David Wasserman.

Trey Hawkins, CUNA vice president of political affairs, says CUNA participation in the national conventions overall is "an opportunity to continue to develop our political brand."

Inside Washington (09/05/2012)

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  • WASHINGTON (9/6/12)--Travis Plunkett has accepted the newly created position of deputy director of the Family Economic and Financial Security Portfolio at the Pew Center on the States. Plunkett will leave his position as legislative director at the Consumer Federation of America (CFA), where he has worked for the past 13 years. In his new position, Plunkett will build and manage a team focused on the ability of families to earn and maintain income, save for the future, and borrow and invest safely and wisely. Rachel Weintraub will assume the position of legislative director at CFA. Weintraub is currently CFA's director of product safety and in-house counsel. In her 10 years there, she has worked on congressional issues, including leading the consumer coalition that persuaded Congress to pass major consumer product safety legislation several years ago …
  • WASHINGTON (9/6/12)--The Federal Reserve will offer $3 billion in 28-day term deposits through its Term Deposit Facility Monday. The offering is part of ongoing small-value operations designed to provide eligible institutions with an opportunity to become familiar with term deposit operations, the Fed said. Competitive bids submitted at the stop-out rate will be pro-rated and will be rounded to multiples of $10,000. Normal rounding convention will be used, except that awards less than $10,000 will be rounded up to $10,000. Non-competitive bids will be allowed. All non-competitive bids will be automatically awarded in full at the stop-out rate of the competitive auction. The minimum amount for a non-competitive bid is $10,000; the maximum amount is $5 million and should be submitted in increments of $10,000. Non-competitive bids must be submitted between 10 a.m. and 2 p.m. ET Monday …

CUNA releases remittance survey for CUs

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WASHINGTON (9/6/12)--The Credit Union National Association (CUNA) continues to seek changes to the Consumer Financial Protection Bureau's (CFPB) pending remittance transfer rule, and has asked credit unions for information on any remittance transfer services they may offer in a new survey.

Under the CFPB remittance rule, remittance transfer providers would be required to disclose the exchange rate, all fees associated with a transfer, and the amount of money that will be received on the other end. Remittance transfer providers will also be required to investigate disputes and correct errors. The bureau's new remittance disclosure rule will take effect Feb. 7.

The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year. The agency has indicated at least 80% of credit unions that offer remittance services would be exempt, but CUNA remains very concerned about the safe harbor provisions and continues to encourage the CFPB to increase this safe harbor threshold.

In the survey, credit unions can answer about their own remittance practices, including whether or not they offer remittances and how many remittance transfer transactions, if any, they complete in a given month.

Information on the total yearly cost of remittance transfer programs, how much each remittance transfer made for each member costs and the amount of fees that are charged to members requesting remittance transfers is requested in the survey. And credit unions can detail how much their total annual remittance program costs could increase, and how much more they may be required to charge their remittance-requesting members, under the CFPB's rule.

Credit unions are also asked to provide basic information on their asset size and comment on how they would be impacted by the rule. Additionally, CUNA in the survey seeks credit unions that wish to participate in a working group of credit union remittance providers. That group will meet with CFPB Director Richard Cordray and his staff in the coming weeks.

"We urge credit unions to take a few moments and complete this survey," said Mary Dunn, CUNA deputy general counsel. "The feedback we receive from credit unions will bolster our ability to press the CFPB to make further improvements to the remittances rule," she added.

CUNA has asked that the survey be completed by close of business today.

For the full CUNA survey, use the resource link.

Membership growth financial strength noted in NCUA state breakdown

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ALEXANDRIA, Va. (9/6/12)--Credit union membership nationwide is surging, and Alaska, Idaho and New Hampshire are helping to lead the way, with each state posting membership increases of 5% or more over the past year, the National Credit Union Administration (NCUA) revealed in the latest quarterly state-by-state review of the financial performance of credit unions.

Click to view larger image Click for larger view


The NCUA last week reported that U.S. credit unions added 1.3 million members in just the first half of this year. That total is more than credit unions realized in full-year 2010 and 2011 combined, and is the second-highest increase in the past decade.

The agency's state-by-state review of quarterly financial statistics showed Alaska ranked first overall in credit union membership growth over the past year, with a growth rate of 6.1%.

Membership growth was also strong in Washington, New York, Texas, and parts of the Midwest and southeast U.S. All of these states averaged membership increases of between 3% and 5% over the past year, the NCUA reported.

Some states with strong membership increases also showed positive movement in returns on average assets (ROAA), delinquency rates, asset growth, deposit growth and loan growth.

Credit unions' ROAA increased in 37 states and territories when compared with last year's averages, and Arizona led the way in ROAA for the second straight quarter, posting an ROAA of 149 basis points (bp). New Jersey credit unions posted the lowest ROAA for the second quarter of 2012, recording an ROAA of 36 bp.

The share of credit unions with positive ROAA increased in 34 states, with New Mexico and Alaska posting the highest average shares: 92%.

New Hampshire again posted the lowest average credit union loan delinquency rate in the nation, averaging 0.5%. In another holdover from last quarter's results, Montana again led the nation in delinquencies, with an average of 3.1%. However, this average was slightly below the previous quarter's total of 3.23%. Delinquency rates in 46 states fell when compared to last year's numbers, according to the report.

Overall, the NCUA said most state-level credit union metrics are experiencing a recovery, but "credit union performance varies widely across the country."

Asset growth for North Dakota's credit unions averaged 13.7% over the past year, the highest of any state. North Dakota also led the nation in loan growth, averaging 13.7%. Nevada, which was particularly hard-hit in the recession, was the only state in the nation to report negative asset growth, averaging a loss of 1.3% over the past year, and that state's loan growth average also declined sharply, dropping by 10.4%.

This is the second state-by-state breakdown of key financial indicators released by the agency.

The latest data are drawn from 2012 second quarter call reports. For the full NCUA report, use the resource link.

CFPB releases credit bureau exam procedures

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WASHINGTON (9/6/12)--The Consumer Financial Protection Bureau (CFPB) on Wednesday detailed the procedures agency staff will follow as they examine credit bureaus and other consumer reporting companies this fall.

The CFPB on Sept. 30 will begin supervision and examination of consumer credit reporting agencies. The agency said its examination authority will cover consumer credit reporting agencies with more than $7 million in annual receipts. This threshold includes about 30 firms that account for 94% of total credit report industry receipts.

The supervision program will make sure credit reporting companies "are playing fairly and by the rules" and ensure that all companies are held to the same standards,  CFPB Director Richard Cordray said in a release.

The agency said its examiners will attempt to verify that consumer reporting companies are:

  • Taking the steps needed to ensure the personal information in credit reports is accurate;
  • Conducting "reasonable investigations" when consumers dispute the accuracy or completeness of any information in their credit report;
  • Disclosing information and credit scores to consumers in a timely fashion, and explaining that information to consumers, as needed;
  • Addressing identity theft issues and protecting active duty military consumers through fraud and active duty alerts; and
  • Blocking the reporting of information that stems from identity theft.
Examiners also will evaluate the systems, procedures and policies used by the company for tracking, handling, investigating and resolving consumer inquiries, disputes and complaints, the CFPB said.

The examination process will be an ongoing process of pre-examination scoping and review of information, data analysis, onsite examinations and regular communication with supervised entities, as well as follow-up monitoring, the CFPB said. Enforcement actions may also be taken as needed, the CFPB added.

There are about 400 firms in the $4 billion consumer credit reporting market, according to CFPB estimates. The three largest credit reporting agencies produce more than three billion consumer credit reports each year, and maintain credit records on more than 200 million Americans, the CFPB has said.

Cordray in a July hearing said dispute resolution and credit report accuracy would be two areas of emphasis for the agency. Inaccurate credit reports deprive lenders of the information needed to properly assess credit risk, and can also cause borrowers to be wrongly denied loans, charged higher interest rates, or passed over for jobs, he noted.

The agency plans to work with credit reporting agencies to improve the accuracy of credit report information.

Charlotte Folks in street know CUs

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CHARLOTTE, N.C. (9/5/12)--Charlotte, N.C., as well as being host to this week's Tuesday-through-Thursday Democratic National Convention for which the opening gavel fell at 5 p.m. (ET) Tuesday, is corporate home to Bank of America.

However, while BoA headquarters may dominate the Charlotte skyline, random person-in-the-street interviews during the DNC's opening CarolinaFest event Monday show that Carolinians know their credit unions.

While skeptical enough about being approached by a reporter for the Credit Union National Association's daily online news service, News Now, to almost universally declining to be quoted by name or photographed (with the exception of Barbara Malloy, who identified herself as a Charlotte resident), about a dozen people approached at the festival were glad to share their thoughts about credit unions.

The majority of those interviewed--like Malloy--claimed membership in a North Carolina credit union.

They cited the following positives in their credit union relationships:

  • Generally better rates on savings and on loans;
  • More personal service;
  • Friendly;
  • Willing to help;
  • More willing to lend (one man interviewed became a credit union fan after being turned down for credit by local banks, then finding a credit union that, he said, got to know him well enough to lend to him;
  • Good for student loans;
  • Good for car loans; and
  • More open to personal stories to establish a relationship.
All was not perfect for credit unions, however, in these on-the-spot interviews. A lack of understanding about field-of-membership rules came through loud and clear from the first young woman asked if she knew credit unions. She indicated she was still angry that she was denied membership a few years ago at a credit union at which her roommate was a member.

When a CUNA representative asked if she might be interested in a website, aSmarterchoice.org, which would help her find a credit union or credit unions she could join, she adamantly waved off the information declaring,"No longer interested!"

Another credit union feature that lacked clarity among the Charlotte residents was credit unions' shared branching networks. When one interviewee lamented that she was "no longer a member" of a credit union that had moved out of her area, she was asked if she knew about shared branching.

"I don't know….," she said. "It has to be convenient to do my banking."

CUNA leagues busy with fin lit housing issues more at DNC

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CHARLOTTE, N.C. (9/5/12)--As delegates of the Democratic National Convention (DNC) awaited the 5 p.m. (ET) opening gavel for the convention at the Time Warner Cable Arena in Charlotte, Credit Union National Association (CUNA) and state league staff blanketed the surrounding area to represent credit unions at events beginning early morning.

For instance, in the shadow of the arena, CUNA Senior Vice President of Legislative Affairs Ryan Donovan and a CUNA contingent attended a Financial Services Roundtable event to honor Rebuilding Together, a network of nearly 200 affiliates that provide no-cost improvements to the homes of low-income homeowners.

Click for slide show From morning until well into the night, CUNA and state credit union league officers and staff represented credit unions at DNC-related events, including the evening's official session at the Times Warner Cable Arena. Early in the evening, a delegation of Democratic women members of the U.S. House voiced their support for another four-year term for President Barack Obama. The evening culminated with a speech by First Lady Michelle Obama. (CUNA Photo)
At the event, Donovan discussed such topics as providing financial services to the underserved, a credit union priority. In a conversation with George Franco, president of National Financial Corp., Donovan described credit union efforts to help their communities in this way. Other topics of the morning included housing and real estate finance policy and retirement savings options for Americans.

Sen. Ben Cardin,  a strong Obama supporter from Maryland, addressed the Roundtable gathering.

Meanwhile, North Carolina Credit Union League President John Radebaugh and members of his staff attended a session devoted to the topic of financial literacy, another credit union priority, that was sponsored by the Council for Economic Education.

Also on Tuesday, CUNA was prominent as a sponsor of the National Journal Group's morning convention briefing entitled, "Election 2012: Leading Pollsters Uncover the Real Story." The session features National Journal Editor in Chief Ron Fournier and Bill Plante of CBS News asking questions of DNC pollster Joel Benenson.

CUNA and the leagues also had coveted passes for the Times Warner Forum to be in attendance for the evening's activities, which culminated with an address by First Lady Michelle Obama, whose remarks sought, in part, to paint a more personal picture of the president.

Use the resource link for a list of the scheduled DNC speakers for Tuesday.

CUNA league CUs to unveil DNC community project The bigger story

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CHARLOTTE, N.C. (9/5/12)--Credit union involvement in the Democratic National Convention (DNC) leave-behind project to benefit Levine Children's Hospital being unveiled here today is an important showcasing of credit unions' dedication to their communities and the long-term benefits brought by the credit union philosophy of "people helping people." And in many ways this week's event, says Credit Union National Association (CUNA) Vice President of Political Affairs Trey Hawkins, is just a small reflection of what credit unions do daily.

Among the highlights of credit union involvement at this national convention, CUNA, the North Carolina Credit Union League, the South Carolina Credit Union League, the National Journal Group, CUNA Mutual Group, CO-OP Financial Services and others wrap up months of work to renovate a rooftop playground at Levine Children's Hospital to provide a stimulating and therapeutic environment for youngsters being treated there.

The Charlotte, N.C., project, to honor the DNC held here this week, mirrors another sponsored by CUNA, state leagues, credit unions and their partners that was unveiled last week at All Children's Hospital to honor the Republican National Convention in Tampa, Fla.

At Levine Children's Hospital in Charlotte, the project has converted an existing rooftop space on the hospital's 12th floor into a dynamic play space that includes a touch-activated light and color "bubble wall," outdoor play equipment, and much needed environmental improvements. More on the project can be seen in the video posted below.



At All Children's Hospital in St. Petersburg, Fla., the playground was designed with special equipment to assist in the rehabilitation of children suffering from a variety of illnesses and accidents.

The two 2012 projects cost a combined $600,000, and credit unions nationwide, as well as the Carolinas Credit Union Foundation and the League of Southeastern Credit Unions Foundation, have raised funds for the projects.

The efforts represent credit unions' tradition of honoring each national political convention city with a "leave-behind" project that will serve the local communities long after the conventions have left town, Hawkins points out.

"This event and the one in Tampa help to spotlight the credit union philosophy to a broad national audience through media coverage. That's important. And sick and injured children and their families will benefit from this project for many years to come. That is significant.

"But these individual projects are not the whole story. The real story is all that credit unions do, day after day, to make a difference in their communities," Hawkins says.

For instance, in total, Credit Unions for Kids, a collaborative effort to raise money for children's hospitals, has raised more than $100 million for Children's Miracle Network (CMN) Hospitals across the nation since 1996.

Since the St. Petersburg project, and the similar one in Charlotte where credit unions have worked in conjunction with the DNC, have such a political nature, Hawkins says, it is important to underscore the bi-partisan nature of the credit union efforts.

"Credit union volunteers of all political persuasions have rolled up their sleeves here and in Florida to work to benefit sick children," Hawkins points out.

He adds that that bi-partisan effort reflects CUNA's approach. CUNA is known for having one of the most evenly distributed records of political contributions between political parties.

Currently 48.2% of contributions made through its political action committee--the Credit Union Legislative Action Committee (CULAC)--have gone to Democratic candidates. Republicans have received 50.3% of CULAC donations. And Independent candidates have received 0.5%.

Cheney advises new-car buyers in iHuffPoi column

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WASHINGTON (9/5/12)--With 2012 shaping up to be the strongest year for new auto sales since the start of the recent recession, Credit Union National Association (CUNA) President/CEO Bill Cheney in a new column in The Huffington Post encouraged potential car buyers to shop around carefully when it comes to financing, noting they may well find amid dealers' 0% ads that their best option is to finance through a credit union.

On average, new car loan rates are substantially lower at the nation's credit unions compared to the banks, Cheney wrote. Financing through a credit union could save consumers more than $1,000 over the life of their auto loan, he added.

While many of the older model cars that remain on the road are a sign of the recent financial crisis, Cheney noted that improving labor markets, and steadily aging automobiles, are resulting in increased demand for new cars. Cheney advised potential auto buyers to maintain good financial habits and shop around when they look for financial products and services. "Besides purchasing a home, buying and financing a new car is one of the biggest financial decisions you'll ever make. Cautious and informed purchasing can save consumers thousands," Cheney said.

He noted that September, when dealers are looking to get rid of this year's models, is an excellent time to negotiate with dealers. He also advised buyers to be wary of rock-bottom interest rates offered by some dealers, as those interest rates, in many cases, are only made available to the top 10% of all purchasers.

Loan terms for low-rate financing through dealerships may be for short terms, such as three- or four-year loans, and buyers may need to go without some offered rebates or cash-back options if they accept a low-rate loan from their auto dealer, Cheney said.

Inside Washington (09/04/2012)

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  • WASHINGTON (9/5/12)--The U.S. Treasury's Community Development Financial Institutions (CDFI) Fund has announced the deadline for New Market Tax Credit (NMTC) program applications, which is scheduled to pass on Sept. 12, may be extended for some entities impacted by Hurricane Isaac. NMTC applicants that are located in a Federal Emergency Management Agency-declared disaster area or are being impacted by disaster conditions in nearby areas may be eligible for a due date extension, the CDFI Fund said. Credit unions are among those eligible to participate in the NMTC, which seeks to spur the investment of new private sector capital into low-income communities. The CDFI Fund has said it plans to make up to $5 billion in tax credits available during the 2012 round of the NMTC, pending authorization by the U.S. Congress …
  • WASHINGTON (9/5/12)--Loan guarantee fees charged by government-sponsored entities Fannie Mae and Freddie Mac will be increased by 10 basis points (bp), the Federal Housing Finance Agency  (FHFA) announced last week. The FHFA said the fee increase is a bid to increase private-sector involvement in the secondary mortgage market. The 10 bp increase would bring the average loan guarantee fee to 38 bp. FHFA Acting Director Edward J. DeMarco said the fee increase will move the GSEs "closer to the level one might expect to see if more credit risk was borne solely by private capital." The FHFA said the increase will take effect on Dec. 1 for loans exchanged for mortgage-backed securities. The increase will take effect on Nov. 1 for loans sold for cash. The GSEs will work with lenders to implement the changes …
  • WASHINGTON (9/5/12)--Although it appears the Treasury department will not pursue litigation against most of the nine failed banks it has investigated since 2007 for possible criminal conduct that contributed to their failures, other agencies could bring civil charges or levy fines against former officers and directors, an outside lawyer told American Banker (Sept. 4). Treasury did not file charges against any of the banks, due to a lack of evidence. The Federal Deposit Insurance Corp. did file a lawsuit in the U.S. District Court for the Northern District of Georgia against former bank directors of Silverton Bank in Atlanta in August 2011. The failed banks could face investigation from other regulators, said Larry Kaplan, a lawyer at Paul Hastings …

CUNA federation urge LICUs to accept NCUA designation

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WASHINGTON (9/5/12)--The Credit Union National Association (CUNA) on Tuesday joined the National Federation of Community Development Credit Unions to encourage interested and eligible credit unions to accept their low-income credit union (LICU) designation before the Sept. 10 response deadline passes.

The National Credit Union Administration (NCUA) early last month notified 1,003 credit unions, indicating they are eligible for low-income designation. That designation brings benefits that include the ability to accept supplemental capital and an exemption from the small business lending cap under certain circumstances. LICU-designated credit unions are also eligible for Community Development Revolving Loan Fund grants and low-interest loans and may accept deposits from non-members.

To qualify as a LICU, a majority of a federal credit union's membership must meet low-income thresholds based on 2010 Census data.

The federation in a release noted that the LICU designation does not commit credit unions to only serving low-income members. "Don't miss a chance to gain access to regulatory powers that will strengthen your credit union's capacity to better serve your members," the federation release added.

The LICU notification initiative, which was incorporated into a relief and recovery package for drought-stricken states announced at the White House in early August, could double the number of LICUs and increase their member business lending by nearly 75%.

According to NCUA estimates, this initiative could unlock between $250 million and half a billion dollars in new, near-term business lending if all qualified federal credit unions participate. The NCUA said the expanded access to credit should translate into job creation.

Starting in October, the federation and CUNA will offer a series of monthly online events aimed at providing a more in-depth understanding of the different benefits and next steps low-income credit unions can take to maximize their impact.

Servicemember financial issues to be webinar focus

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WASHINGTON (9/5/12)--Servicemembers Civil Relief Act (SCRA) compliance, Permanent Change of Station guidance and other financial issues facing active-duty military personnel and their families will be central topics at a Sept. 10 interagency webinar.

Representatives from the National Credit Union Administration, the Consumer Financial Protection Bureau, the Department of Justice, the Department of Treasury, the Federal Housing Finance Agency, the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency will also discuss their work to address servicemember financial issues and their efforts to protect servicemembers.

Federal Reserve Division of Consumer and Community Affairs Director Sandy Braunstein will introduce the webinar, and Holly Petraeus, CFPB assistant director for servicemember affairs, will also present on the agency's servicemember financial protection efforts.

The 1.5 hour-long webinar is scheduled to begin at 2:30 p.m. ET. Recent Home Affordable Modification Program enhancements, enforcement actions, and short sales for home-owning servicemembers are also on the agenda.

To register for the webinar, use the resource link.

NCUA prohibits three from CU work

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ALEXANDRIA, Va. (9/5/12)--The National Credit Union Administration (NCUA) has prohibited three individuals from participating in the affairs of any federally insured financial institution.

They are:

  • Former Great Falls Regional FCU, Lewiston, Maine, employee Kelsey Cyr, who was convicted of theft. Cyr was sentenced to 364 days in prison, but that sentence was suspended to one year of probation. Cyr will also be required to pay $10,424 in restitution;
  • Former South Atlantic FCU, Boca Raton, Fla., employee John Ercolino, who was convicted of grand theft greater than $20,000. Ercolino was sentenced to five years' probation and ordered to pay $110,000 in restitution; and
  • Former Financial Center CU, Stockton, Calif., employee Brandie Marie Roach, who pleaded guilty to unauthorized use of personal identifying information of another person. Roach was sentenced to probation.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. For the full NCUA release, use the resource link.

NEW CUNA federation urge LICUs to accept NCUA designation

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WASHINGTON (UPDATED: 2:25 p.m. ET, 9/4/12)--The Credit Union National Association (CUNA) has joined the National Federation of Community Development Credit Unions to encourage interested and eligible credit unions to accept their low-income credit union (LICU) designation before the Sept. 10 response deadline passes.

The National Credit Union Administration early last month notified 1,003 credit unions, indicating they are eligible for low-income designation. That designation brings benefits that include the ability to accept supplemental capital and an exemption from the small business lending cap under certain circumstances. LICU-designated credit unions are also eligible for Community Development Revolving Loan Fund grants and low-interest loans and may accept deposits from non-members.

To qualify as a LICU, a majority of a federal credit union's membership must meet low-income thresholds based on 2010 Census data.

The federation in a release noted that the LICU designation does not commit credit unions to only serving low-income members. "Don't miss a chance to gain access to regulatory powers that will strengthen your credit union's capacity to better serve your members," the federation release added.

The LICU notification initiative, which was incorporated into a relief and recovery package for drought-stricken states announced at the White House in early August, could double the number of LICUs and increase their member business lending by nearly 75%.

According to NCUA estimates, this initiative could unlock between $250 million and half a billion dollars in new, near-term business lending if all qualified federal credit unions participate. The NCUA said the expanded access to credit should translate into job creation.

Starting in October, the federation and CUNA will offer a series of monthly online events aimed at providing a more in-depth understanding of the different benefits and next steps low-income credit unions can take to maximize their impact.

To DNC CarolinaFest backdrop CUNA CUs launch into convention activities

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CHARLOTTE, N.C. (9/4/12)--Due to the nation's observance Monday of Labor Day, the Democratic National Convention (DNC) organized a family-oriented event here yesterday in the convention-host city--a kind of "soft launch" to official DNC events that start today.  (See related story: CUNA, leagues arrive in Charlotte to advocate for CUs at DNC.)

However, even with the festival atmosphere in the streets yesterday, observed Credit Union National Association (CUNA) Senior Vice President of Legislative Affairs Ryan Donovan, CUNA, state credit union leagues and credit unions marched right into convention-related sessions Monday.

With daily organizational meetings to go over strategy, a daily briefing by National Journal Group to highlight convention and campaign issues and for which CUNA is a sponsor, and issues meetings on such things as a financial literacy, CUNA officers and staff are deeply engaged, representing credit unions and credit union issues from the start, Donovan said.

"Welcoming events, such as one hosted by Rep. Mel Watts (D-N.C.) Monday, give us many opportunities to represent credit unions both among convention delegates and Washington policymakers," Donovan noted. Watts is a scheduled speaker at DNC convention floor activities this week.

The first two days of the 2012 DNC--today and Wednesday--are being held at Time Warner Cable Arena. President Barack Obama and Vice President Joe Biden will accept the Democratic nominations for president and vice president Thursday at Bank of America Stadium. Bank of America is headquartered in Charlotte and its office dominates the skyline.

The DNC list of speakers for the week include:

  • San Antonio Mayor Julian Castro, who will be the first Latino keynote speaker at a Democratic National Convention;
  • Former President Bill Clinton;
  • Rep. James Clyburn of South Carolina, who will be participating in the credit union leave-behind project to benefit Levine Children's Hospital here (see related story: Clyburn to help CUNA-DNC playground ribbon-cutting);
  • Rep. Barney Frank of Massachusetts, former chairman of the House Financial Services Committee;
  • House Democratic Leader Nancy Pelosi of California;
  • Sen. Charles Schumer of New York, a co-sponsor of CUNA-supported S. 509, legislation to increase the credit union member business lending cap;
  • DNC Chair Rep. Debbie Wasserman Schultz of Florida, who worked with CUNA and credit unions and tried to keep language limiting interchange fees out of the final Dodd-Frank Wall Street Reform Act;
  • Rep. Mel Watt of North Carolina, a member of the House Financial Services Committee;
  • Former President Jimmy Carter (via video); and,
  • Many dozens of other party notables.

Clyburn will participate in CUNA DNC playground unveiling

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CHARLOTTE, N.C. (9/4/12)--Rep. James Clyburn (D-S.C.), who has been assistant Democratic leader in the U.S. House since 2011 and was House Majority Whip from 2007 to 2011, will participate in the ribbon-cutting ceremony scheduled here for Wednesday to reveal a highlight of credit union involvement in the Democratic National Convention (DNC) --a "leave-behind" project to benefit the young patients of Levine Children's Hospital, as well as their families and community.

The Credit Union National Association (CUNA), the North Carolina Credit Union League, the South Carolina Credit Union League,  the National Journal Group, CUNA Mutual Group, CO-OP Financial Services and others have been involved for months in renovating a rooftop playground at Levine's to provide a stimulating and therapeutic environment for youngsters being treated there.

The Charlotte, N.C., project, to honor the DNC held here this week,  mirrors another sponsored by CUNA, state leagues, credit unions and their partners that was unveiled last week at All Children's Hospital to honor the Republican National Convention in Tampa, Fla.

At Levine Children's Hospital in Charlotte, the project has converted an existing rooftop space on the hospital's 12th floor into a dynamic play space that includes a touch-activated light and color "bubble wall," outdoor play equipment, and much needed environmental improvements. At All Children's Hospital in St. Petersburg, Fla., the playground was designed with special equipment to assist in the rehabilitation of children suffering from a variety of illnesses and accidents.

The efforts represent credit unions' tradition of honoring each national political convention city with a "leave-behind" project that will serve the local communities long after the conventions have left town.

The two 2012 projects cost a combined $600,000, and credit unions nationwide, as well as the Carolinas Credit Union Foundation and the League of Southeastern Credit Unions Foundation, have raised funds for the projects.

CUNA closed on Labor Day

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WASHINGTON and MADISON, Wis. (9/3/12)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association are closed today due to the Labor Day holiday.

However, CUNA staff will be at the Democratic National Convention, which will open with family-centered activities today and official activities beginning Tuesday in Charlotte, N.C. Although News Now won't publish a regular edition today, it will report on the pre-convention activities today. News Now will resume regular publication on Tuesday.

CUNA leagues arrive in Charlotte to advocate for CUs at DNC (09/01/2012)

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CHARLOTTE, N.C. (9/3 /12)--The Democratic National Convention (DNC) kicks off today with a day of family-oriented activities prior to the launch of official convention events, and credit union representatives, including staff from the Credit Union National Association (CUNA) and the state credit union leagues, are here to raise the profile of credit unions and credit union issues during this convention week.

The DNC is hosting today's CarolinaFest 2012: An American Celebration, which it hails as an opportunity to experience the best of the Carolinas' food and culture, excellent entertainment, and the "rare opportunity to witness history in the making."  Talent such as James Taylor, Jeff Bridges, and Janelle Monae is being featured.

The Monday through Thursday convention will culminate in President Barack Obama's acceptance of the Democratic Party's nomination to be the 2012 candidate for president.

Credit union participation in the DNC, as well as in last week's Republican National Convention in Tampa, Fla., follows a long tradition, started in 1988, of keeping credit unions and the credit union philosophy of "people helping people" in the national spotlight at the political conventions.

This week's credit union activities come on the heels of a successful RNC presence, which included the participation of Ann Romney--wife of Republican presidential candidate Mitt--participating in a CUNA- and league-sponsored event.

Ann Romney helped CUNA President/CEO Bill Cheney and representatives from CUNA, the Southeastern Credit Union Foundation, the League of Southeastern Credit Unions, the National Journal Group, CUNA Mutual Group, CO-OP Financial Services and others at a ribbon cutting ceremony for a new therapeutic playground at All Children's Hospital in St. Petersburg.

At the top of her remarks at the ribbon cutting ceremony, Romney thanked credit unions for their fundraising efforts, which made the playground project possible.

A comparable "leave-behind" project will be a credit union highlight this week in Charlotte when, on Wednesday, credit unions will unveil a renovated rooftop playground for young patients at Levine Children's Hospital--a project that has been in the design and creation process for many months.

Assistant House Democratic Leader Jim Clyburn (D-S.C.) will join CUNA CEO Bill Cheney and National Journal Editor-in-Chief Ron Fournier in cutting the ribbon on the playground.

Also during the convention, CUNA is a sponsor of the National Journal's Convention Daily Briefings, which will feature party newsmakers here, as it did in Tampa.

The on-site events feature moderators such as Ron Brownstein, a two-time finalist for the Pulitzer Prize for his coverage of presidential campaigns and National Journal Group's editorial director; Chuck Todd, the chief White House correspondent for NBC News; Good Morning America co-host George Stephanopoulo;, and NBC correspondent Chelsea Clinton, as well as speakers and panelists such as Rep. Nancy Pelosi (D-Calif.) and former Republican senator from Mississippi Trent Lott.

On Wednesday, CUNA, CUNA Mutual Group, state credit union leagues, and credit unions will host an event to honor all delegates attending the convention at the Aria Tuscan Grill Restaurant.

In addition to delegates, every Democratic member of the U.S. Congress has been invited and as of late last week more than 200 total invitees had accepted the initiation. CUNA expects 250-300 to attend.

This, and a similar event at the RNC in Tampa, serve to draw convention dignitaries to a credit union-sponsored event to highlight credit unions, their operating philosophy of "people helping people," and credit union issues.

Trey Hawkins, CUNA vice president of political affairs, says CUNA participation in the national conventions overall is "an opportunity to continue to develop our political brand." Hawkins adds, "The conventions are an opportunity to talk to and communicate with all of the policy and media and political elites in one place. That's an opportunity we want to take on behalf of credit unions."

Watch CUNA's News Now and its Twitter-fed updates on NewsNowLiveWire for up-to-the-minute coverage of credit union involvement at the DNC this week