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Cheney outlines CU issues at Wisconsin league meeting
PEWAUKEE, Wis. (5/18/11)--Some of the top issues of concern to credit unions are truly consumer issues and top concerns of 2.2 million Wisconsin citizens who are the member-owners of the
Credit Union National Association President/CEO Bill Cheney tells the Wisconsin Credit Union League annual meeting this week that credit unions' top issues are truly consumer issues. (Photo provided by the Wisconsin Credit Union League)
financial co-ops. That was the message shared by Bill Cheney, president/CEO of the Credit Union National Association (CUNA), with credit unions at the Wisconsin Credit Union League's 77th Annual Meeting & Convention in the Wisconsin Dells. Cheney cited the strength and stability of credit unions nationally--with strong net worth, solid earnings and strong asset quality--as well was their more recognizable profile on Capitol Hill. During a CUNA conference, he said, House Speaker John Boehner praised credit unions and thanked them for not turning their backs on their members during challenging economic times. CUNA presses constantly to know where all 535 members of Congress stand on issues that concern credit unions and be responsive to them, he said. Among the top concerns he discussed were:
* Interchange legislation: The Federal Reserve's proposed rule on debit card interchange fees--set to go into effect July 21--would disadvantage consumers because its current exemption for smaller card issuers won't work as intended. Credit union members who can least afford increased costs would shoulder the effect of the rule, Cheney said, noting that the Dodd-Frank reforms passed last year did not allow the Fed to consider all the costs of providing a card program. However, Cheney added the Fed received more than 11,000 comment letters--about half of them from credit unions--on the issue and that CUNA is working diligently on regulatory, legislative and legal fronts to delay the rule’s implementation. He encouraged activists to use league resources and CUNA’s Grassroots Action Center to urge Wisconsin’s U.S. senators for a delay in the rule, further study and do-over. * Member business lending (MBL). The proposed MBL bill by Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.) to increase the MBL lending cap is “a win on the public policy argument,” Cheney said. The measure, supported by the Treasury Secretary and Obama administration, would add $13 billion of new credit and create 140,000 jobs in the first year alone at no cost to taxpayers. Already, including Udall and Royce, it has 19 co-sponsors in the U.S. Senate and 26 in the House, and support is bipartisan. “The MBL legislation is important to all credit unions because of how important it is to the whole economy,” Cheney emphasized. Credit union business loans nationally have a charge off rate of 0.66% for 2010, compared with banks’ rate that is nearly three times higher at 1.75%. “Long before there was a Federal Credit Union Act, credit unions made business loans for provident purposes,” he said, adding that a banker once admitted to him that credit unions making business loans helps his bank because everyone benefits when entire economies are more prosperous. Passing the MBL legislation is still a top priority for the movement, he said. * Credit union taxation. While no one on Capitol Hill has suggested increasing taxes on credit unions, Cheney emphasized that the movement should be vigilant because Congress is looking to broaden the U.S. tax base to lower tax rates for everyone. A tax on credit unions is a tax on members, not a corporation, he said, urging credit unions to continue sharing stories of how they help working people and communities. The most revenue that could be raised by new taxes on credit unions--around $1 billion--pales in comparison to the $14 billion in annual savings from better rates and lower fees that credit unions accrue for their members, he said, adding that preserving credit unions’ tax status is policy that is pro-consumer. * Supplemental capital. Credit unions must have access to new forms of capital so they don’t have to pass costs on to members and can avoid needing to shun member deposits, Cheney stressed. He noted comments of National Credit Union Administration (NCUA) Board Chair Debbie Matz in support of supplemental capital and distinguished between new streams of capital and “ownership capital,” which credit unions would not be willing to forego. * Regulation & exams. Credit unions’ increasing regulatory burden is not a sustainable path forward, Cheney said, adding that CUNA would continue to challenge the NCUA budget as a continuing drain on member resources. He pointed to the Credit Union Bill of Rights intended as a guide credit unions can point to when interacting with NCUA examiners, as well as a website for sharing concerns about exam practices.
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