Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

News Now: April 24, 2015

NCUA's Fazio highlights agency support for reg. relief legislation

WASHINGTON (4/24/15)--The National Credit Union Administration supports several CUNA-backed regulatory relief bills, including ones that would raise the member business lending cap and allow supplemental capital.

Larry Fazio, director of the NCUA's Office of Examination and Insurance, testified before the U.S. House Financial Service subcommittee on financial institutions and consumer credit at a hearing designed to get regulators' perspectives of regulatory burden.

"NCUA encourages Congress to consider providing regulators like NCUA with flexibility to write rules to address such situations, rather than imposing rigid requirements," Fazio said. "Such flexibility would allow the agency to effectively limit additional regulatory burdens, consistent with safety and soundness."

Fazio said the NCUA supports three bills:
  • The Credit Union Small Business Jobs Creation Act (H.R. 1188), which would raise the member business lending cap to 27.5% of assets;
  • The Credit Union Residential Loan Parity Act (H.R. 1422), which would exempt credit union loans to purchase a one- to four-unit, non-owner occupied residential dwelling from the 12.25% cap on member business lending; and
  • The Capital Access for Small Business Act (H.R. 989), which would allow credit unions to raise supplemental capital.
Fazio outlined other areas the NCUA is pushing for regulatory relief, including a finalized rule that will be presented to the board April 30 regarding field-of-membership rules. (See related story in today's News Now: Final FOM rule tops April 30 NCUA agenda.)

Subcommittee chair Rep. Randy Neugebauer (R-Texas) asked Fazio if he believed the NCUA is "getting it right" when it comes to its revised risk-based capital proposal, and about a "capital cushion" that might be required of credit unions should the rule be finalized.

Fazio said the rule would likely have a "relatively modest impact," but it would be effective in picking up outliers.

Rep. Mick Mulvaney (R-S.C.) inquired as to why the NCUA stopped holding public meetings regarding its budget and asked if the agency would hold a meeting for its 2016 budget. Fazio said the NCUA board has not made a decision on that yet.

For some on the committee, regulatory relief cannot come soon enough for constituents. Rep. Frank Guinta (R-N.H.) said he has had many discussions in recent months with credit unions and community banks about regulatory burden.

"I'm actually a little discouraged, and I remain discouraged, with some of the things I've been hearing relative to the regulatory burdens," he said. "This is the single issue that I hear about from institutions in New Hampshire, more than any other issue."

Other Resources

Final FOM rule tops April 30 NCUA agenda

ALEXANDRIA, Va. (4/24/15)--Consideration of a final rule that would change field-of-membership regulations tops the agenda for the National Credit Union Administration's April 30 board meeting.

NCUA Director of Examination and Insurance Larry Fazio provided some insight into the final rule during testimony before a House subcommittee Thursday. (See related story: NCUA's Fazio highlights agency support for reg. relief legislation.)

"The final rule will include substantially more regulatory relief than the proposed rule as NCUA responds to the comments received," Fazio said. "For example, the Board will likely add five additional types of groups that will automatically satisfy the associational common bond provisions."

Other items on the agenda are:
  • Final rule on corporate credit unions concerning technical amendments;
  • Proposed rule on aggregate lending limit for corporate credit unions;
  • Proposed rule on adding share insurance coverage under interest on lawyer trust accounts;
  • An exemption request by the State of Connecticut Department of Banking;
  • Board briefing on a final interagency rule concerning minimum requirements for appraisal management companies; and
  • National Credit Union Share Insurance Fund quarterly report.
Registration is still open for the live video feed of the meeting. Reminder, individuals interested in watching the meetings online must register each month.

Other Resources

House passes 2nd cyber bill to promote info sharing

WASHINGTON (4/24/15)--The U.S. House passed the National Cybersecurity Protection Advancement Act of 2015 Thursday, by a 355-63 vote. This is the second cybersecurity-related piece of legislation passed by the House this week, the Protecting Cyber Networks Act (H.R. 1560), was passed Wednesday.

H.R. 1560 allows enhanced sharing of information about cybersecurity threats, while H.R. 1731 amends the Homeland Security Act of 2002 to enhance multi-directional sharing of cybersecurity risk information.

CUNA supports both pieces of legislation. Both bills will be combined. The Senate is expected to act on cyberthreat information sharing legislation at some point in the coming weeks.

Other Resources

Fin. Lit. Month gets 'real' with fin. ed. fairs

CU System
STRATFORD, Conn. (4/24/15)--Nothing says financial literacy like a credit union-run reality fair.

Students from Bunnell High School in Stratford, Conn., receive a dose of reality during a recent reality fair put on by Sikorsky CU. (Sikorsky CU Photo)
Credit unions nationwide are taking advantage of the increased awareness of financial education during National Financial Literacy Month by putting on scores of reality fairs.

Through these fairs, students assume different livelihoods that they must consider when making various mock-financial decisions. The result is a taste of what life can be like in the real world.

"Child care is hitting me hard, plus having to buy two vehicles," said a participant of a reality fair led by Coastal FCU, Raleigh, N.C., earlier this month. The student had picked the role of a low-income worker. "(Expenses) add up on a low income."

Sikorsky Financial CU, Stratford, Conn., added its own wrinkle to its reality fair by incorporating a "Wheel of Reality" that can alter a participant's cash flow to simulate the unexpected events and expenses that occur in everyday life.

"I have seen what happens when people aren't prepared for their financial present or future," said Mike D'Orlando, Sikorsky operations manager. "This event gives young people something to think about many years before they might experience it, and hopefully they will be ready when the time comes."

People First FCU, Allentown, Pa., hosted the Lehigh Valley Chapter of Credit Unions' reality fair at DeSales University earlier this week, the third event of its kind organized by the chapter in the last three years ( Life is a Highway April 23).

Nearly 300 students from nine schools participated in the event, which was operated by 50 volunteers from credit unions throughout Pennsylvania.

The reality fair also was attended by the offices of Rep. Michael Scholssberg (D-Lehigh) and Rep. Peter Schweyer (D-Lehigh).

A team of New Hampshire-based credit unions partnered to put on a joint reality fair earlier this month at Manchester (N.H.) Community College ( Daily CU Scan April 17).

More than 500 students participated in the "CU4 Reality" event, organized by Northeast CU, Portsmouth; Bellwether Community CU, Manchester; and Granite State CU, Manchester.

Victoria Reishus, Northeast CU assistant vice president of marketing, counsels students on their budgeting decisions. (Cooperative Credit Union Association Photo)
"The financial fair is a great way for students to learn about budgets and their expenses vs. their spending money," said Victoria Reishus, Northeast vice president of marketing. "Some of the students were very responsible with their fictitious budgets, while for others it was a great opportunity to educate them on the benefits of saving their money."  

Hanscom FCU, Hanscom Air Force Base, Mass., also put on a reality fair recently for students from the Air Force Junior Reserve Officer Training Corps at Lowell and Bedford high schools ( Daily CU Scan April 16).

"Having airmen and civilians from the base here helped the students see that everyone needs to watch their spending and create a savings plan," said Paul Marotta, Hanscom board chair.

Calif. league monitoring online payday lending proposal

CU System
SACRAMENTO, Calif. (4/24/15)--California regulators recently introduced a proposal aimed to curb the use of Internet-based payday lending services by prohibiting lenders from accessing their customers' online bank accounts.

Customers often secure payday loans from online lenders by handing over access to their bank accounts, a measure the lenders require because they worry their customers may blow off the loans ( American Banker April 20).

But the proposed changes by the California Department of Business Oversight would ban the practice, and require that loans only be secured through a paper check.

"It may not necessarily be a bad thing to reduce the amount of payday lending business that's conducted online," said Thomas Dresslar, spokesperson for the business oversight department, adding, "The more the scope of payment instruments expands beyond paper, the more dangerous the market becomes for consumers."

The proposal could cripple the online payday lending industry in California, American Banker reported, while posing less of a threat to traditional financial institutions such as credit unions and banks.

Still, the California and Nevada Credit Union Leagues plans to monitor the proposed changes as the process moves forward.

"This proposal applies to payday lenders and is on our watch list right now," Sharon Lindeman, league vice president of regulatory advocacy, told News Now . "We will be studying the proposal as it evolves."

Added Rodney Wilson, league senior legislative advocate: "We are monitoring all state issues that impact credit unions and the financial services marketplace, including this issue. California credit unions offer healthy competition in the financial services marketplace to ensure consumers have access to alternatives that are affordable, sustainable and that comply with state laws and regulations."

'Your Money, Your Goals' fin. lit. campaign growing in Minn.

CU System
BRAINERD, Minn., and COLLEGEVILLE, Minn. (4/24/15)--The Minnesota Credit Union Network (MnCUN) and MidMinnesota FCU, Baxter, welcomed a special guest during a recent "Your Money, Your Goals" training session.

Deputy Commerce Commissioner Shane Deal (left) works with Bridges of Hope case workers during a training session at MidMinnesota FCU. (Minnesota Credit Union Network Photo)
Shane Deal, deputy commissioner of the Minnesota Department of Commerce, joined the session held at Bridges of Hope--a local nonprofit--to learn about the program, which allows credit unions to help low-income consumers set goals and choose financial products that build strong financial habits.

Credit unions also use "Your Money, Your Goals," a toolkit developed by the Consumer Financial Protection Bureau, to train local nonprofits such as Bridges of Hope to serve low-income consumers.  

"Personal finances can be a tough topic for families to discuss," Deal said. "The training MidMinnesota provides to nonprofits like Bridges of Hope helps start the conversation and gives Minnesotans of all ages a stronger foundation of financial skills."

Following the training session, Deal and Larry Pogemiller, commissioner of the Minnesota Department of Higher Education, joined MnCUN on a visit to a student-run credit union branch started by Collegeville Community CU in Sexton.

The branch, which is the first student-run branch to open on a college campus in Minnesota, was founded with financial support from the Minnesota Credit Union Network Foundation.

"Financial education is a lifelong learning experience," Pogemiller said. "Collegeville Community Credit Union's student-run branch provides students with opportunities to share the financial knowledge they gain on the job with their classmates and to develop experience that can help them in their future careers."

Both events were held in celebration of National Financial Literacy Month, and to demonstrate the commitment credit unions throughout the state have made to financial education.

Ohio's Montgomery County CU placed into conservatorship

ALEXANDRIA, Va. (4/24/15)--Dayton, Ohio's Montgomery CU Inc. was placed into conservatorship Thursday, and the National Credit Union Administration has been named conservator, according to the agency.

Montgomery County CU was placed into conservatorship by the superintendent of the Ohio Division of Financial Institutions (DFI).

The DFI placed Montgomery County CU into conservatorship after the discovery of unsafe and unsound practices. While continuing normal member services, the two agencies will work to resolve issues affecting the credit union's safety and soundness.

Montgomery County CU Inc. is a federally insured, state-chartered credit union with 6,605 members and $27.3 million in assets, according to the credit union's most recent call report.

It was chartered in 1963, and serves anyone who lives, works, worships or attends school in Montgomery County, Ohio.

Deposits at Montgomery County CU remain protected by the National Credit Union Share Insurance Fund. The NCUA has posted a FAQ document about the conservatorship.

Other Resources


News Now LiveWire
Final field-of-membership rule tops April 30 NCUA agenda
22 hours ago
.@CUNA's @Nussle speaks to @VonnieQuinn about #StoptheDataBreaches and reg. relief.
1 day ago
RT @NCUFoundation: .The Foundation's @hylandhighway with @NatlJumpStart President/CEO Laura Levine at #FLHillDay2015 today:…
1 day ago
Seriously underwater homes rise, new-home sales tumble News Now:
1 day ago
#NewsNow Cornerstone Foundation awards $71K in grants
1 day ago