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CUNA to serve as clearinghouse for TNC legislation info

WASHINGTON (4/27/15)--As legislation regarding transportation network companies (TNCs) such as Uber, Lyft and Sidecar is being considered in at least 35 states, CUNA is serving as a clearinghouse for expertise, guidance and information regarding TNCs.

CUNA and state leagues are working to ensure the bills contain requirements that drivers have comprehensive and collision insurance for TNC drivers.

Drivers who work for TNCs generally use personal vehicles to perform their duties, which can result in lapses in coverages that can leave drivers uninsured. In addition, the functions of the job can entail increased risky activities by drivers, including transporting strangers, making more stops and dealing with distractions that come with having additional people in a car.

Credit unions, as institutions that make car loans, can be vulnerable as lienholders on the vehicles.

There are three periods of exposure for TNC drivers: when the app is activated, but not matched to a passenger; when a match is made and the driver is en route to pick up the passenger; and when the passenger is being transported.

CUNA and state credit union leagues support legislatoin that would:
  • Require drivers using personal vehicles with liens on them to provide proof to lienholders and TNCs of comprehensive and collision insurance that provides coverage during all phases;
  • Have coverage of at least $50,000 per person for death/bodily injury, $100,000 per incident for death/bodily injury and $25,000 for property damage when the driver is logged into the TNC network and available, but not engaged in a prearranged ride;
  • Have coverage of $1 million when the driver is engaged in a prearranged ride;
  • Require a TNC's insurance to cover claims if a driver's insurance lapses and does not meet the required coverage; and
  • Require TNCs to disclose to drivers that the driver's personal insurance policy may not provide coverage when the driver is logged into the TNC's network and available to receive requests, or is engaged in a prearranged ride.
Haley DaVee, vice president of governmental affairs at the Kansas Credit Union Association, told News Now that, from the perspective of the credit union industry and the financial services industry, it's very important to get states to pass legislatoin with the above provisions "to show that there is a need for it, to protect consumers who are driving vehicles that are not properly insured,"

Uber and the insurance industry collaborated on a model bill for states recently, but their model does not contain a requirement for comprehensive and collision insurance.

Recently a TNC bill was enacted in Utah with the assistance of the Utah Credit Union Association, which contains all the items CUNA and the leagues are searching for. In Kansas, the league says a satisfactory bill was vetoed by the governor.

States such as Arkansas, Arizona, Idaho, Kentucky, North Dakota and Virginia have recently enacted TNC legislation that does not require comprehensive and collision coverage.

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Nussle highlights CU data breach costs, reg. relief on Bloomberg radio

WASHINGTON (4/27/15)--CUNA President/CEO Jim Nussle took to the airwaves Friday to highlight the massive costs facing credit unions due to the increasing number of merchant data breaches.  Nussle also explained the consumer benefits of regulatory relief measures for credit unions and how easing regulatory burden would help credit unions serve their members even better.

Nussle was interviewed by Vonnie Quinn on "Bloomberg Advantage."
The CUNA leader explained to Quinn and her national audience that merchants are the weak link when it comes to data security.
He highlighted CUNA's efforts, both in Congress and in the courts, to push for stronger merchant standards that protect consumers as well as credit unions and other financial institutions.
"We're saying that somebody has got to put the merchants into a more responsible position, they should be responsible for the data if people are coming and using their credit cards, that needs to be protected," he said. "The same way every credit union and bank must protect the information of its customers, merchants need to do the same."
Nussle added that few breaches occur at credit unions and other financial institutions because of the standards laid out in the Gramm-Leach-Bliley Act, but merchants have no such standards.
"This is a situation where the bad guys are getting to the data through merchants, they're not getting into the data through credit unions and banks," he said. "The only way for us to protect it is to make sure merchants have the same standards we have."
Quinn asked about the general outlook for credit unions, and while Nussle said demand for loans is going up, easing of regulatory burdens is essential for credit unions to meet that demand.
"We'd obviously like to see a reduction in the regulatory burden that just adds costs and paperwork and sometimes doesn't allow us to make a student loan or do a mortgage because of the costs," Nussle said. "But we're working with other small financial institutions to work with Congress to try and lessen some of those regulatory issues so we can get more capital out into the marketplace to create jobs."

More than 1,650 RBC2 comments filed by Friday: Deadline is today

ALEXANDRIA, Va. (4/27/15)--As of late Friday afternoon, credit unions, state credit union leagues, CUNA and other stakeholders had sent 1,654 comment letters on the National Credit Union Administration revised risk-based capital proposal (RBC2). The comment period ends at 11:59 p.m. (ET) today.

CUNA continues to believe the proposal is a solution in search of a problem, but should the NCUA proceed with the rule, CUNA believes a number of changes are necessary.
This includes:
  • Dropping the new proposed capital adequacy provisions, which are beyond net worth and risk-based capital ratio requirements;
  • Reduction of a number of the risk weights;
  • Identifying "complex" credit unions on more than asset size, and the definition should only apply to credit unions of at least $500 million in assets;
  • Expansion of the conditions under which goodwill could be included in the risk-based capital ratio;
  • Minimizing the burden of expanding the call report for purposes of RBC2; and
  • Allowing credit unions to use supplemental capital in meeting risk-based capital requirements;
  • Delaying implementation of RBC2 until 2021, to coincide with expected refunds from the Corporate Stabilization Fund.

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Debt collection industry, FTC scheduled for June 15 dialogue

WASHINGTON (4/27/15)--The first of several debt collection dialogues hosted by the Federal Trade Commission (FTC) will be held in Buffalo, N.Y., June 15.

The FTC will conduct the event in conjunction with the Office of the New York Attorney General, and a representative from the Consumer Financial Protection Bureau is expected to participate as well.
According to the FTC, the event will feature a discussion of recent enforcement actions, consumer complaints about debt collection practices and compliance issues.
The FTC has said this will be the first in a series of dialogues, with events in Atlanta and Dallas to be announced in the coming weeks.
The event is free and open to the public, but pre-registration is recommended. It will be held from 1:30 to 4 p.m. at the Burchfield Penney Art Center at SUNY Buffalo State.

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Inside Washington

WASHINGTON (4/27/15)-- The Federal Housing Finance Agency is moving quickly to finalize proposed financial requirements for nonbank firms that service Fannie Mae and Freddie Mac loans , according to an article in American Banker (April 24). FHFA Deputy Director Sandra Thompson was quoted as saying the agency anticipates final guidance to be approved "in the next month or so." FHFA, Thompson noted, has seen that banks and credit unions are increasingly transferring their mortgage servicing to nonbank servicers.  FHFA does not regulate servicers directly, but Thompson said it is clearly defined and communicate servicer eligibility requirements are essential. As proposed, the artifice noted, Fannie and Freddie servicers would have to meet minimum net worth, capital and liquidity requirements. Stronger standards, Thompson said, will help bolster the market outlook regarding the finances and skills of Fannie and Freddie servicers. Thompson was addressing a Women in Housing and Finance event here ...

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