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Newest corp. CU plan needs significant changes CUNA

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WASHINGTON (1/25/11)--Significant changes to the National Credit Union Administration’s (NCUA) November proposed rule regarding corporate credit unions are needed before the Credit Union National Association (CUNA) could support the plan, the association said Monday. The November proposal was sent out for comment just two months after the NCUA approved its comprehensive overhaul of the regulatory structure of the corporate credit union system. This later proposed rulemaking is intended, in part, to limit credit union membership in corporates to one corporate at a time, with some exceptions, and to change some internal control and reporting requirements. In a comment letter to the NCUA released Monday, CUNA said it does not support the limit on membership and does not consider it good public policy. “We believe the better public policy would be to allow natural person credit unions to decide which corporates they want to join and to be able to support them without these membership limitations. This approach would benefit natural person credit unions as well as corporate credit unions and would not jeopardize the safety and soundness of either group of credit unions or the National Credit Union Share Insurance Fund,” CUNA Deputy General Counsel wrote in the CUNA letter. CUNA also expressed serious concerns about the agency’s intention to ask for “voluntary” contributions from non-federally insured credit unions (non-FICUs) to the agency’s corporate credit union stabilization fund. CUNA said the NCUA has no authority to assess non-FICUs and would not be able to defend that position legally. In fact, CUNA maintained, the statutory record “could not be clearer” that only federally insured credit unions may be assessed for corporate stabilization costs. In its extensive comments regarding the NCUA “technical corrections” to its initial corporate rule, CUNA also said that many of the issues addressed in the November rule--such as internal controls and reporting requirement--are already adequately addressed elsewhere in NCUA regulations.

Hill staffers hear CU perspective in CUNA briefing

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WASHINGTON (1/25/11)--New members of the House Financial Services Committee team, as well as other congressional staffers, were the focus Monday of the Credit Union National Association’s (CUNA) briefing on credit union issues on Capitol Hill. About 50 congressional staff members, from offices of House members across the nation, attended CUNA’s briefing “Understanding Credit Unions” on Capitol Hill Monday. The briefing, which featured updates by CUNA staff, focused on how credit unions are different from other financials; the challenges credit unions face and how they address them); and, what Congress can do to help credit unions better serve their members. CUNA President/CEO Bill Cheney kicked off the discussion by
Click to view larger image CUNA President/CEO Bill Cheney (seated at table second from left) and senior CUNA staff brief 50 Capitol Hill staffers on the credit union difference and how the 112th Congress can help credit unions better serve their members. (CUNA Photo)
detailing the credit union difference, and outlining the key issues facing credit unions. CUNA’s economic team of Bill Hampel and Mike Schenk described the operating environment and outlook for credit unions. Mary Dunn, CUNA senior vice president of regulatory advocacy, gave an overview of the regulatory burden facing credit unions, including the impact of the new Interchange law. And Ryan Donovan, CUNA vice president of legislative affairs, gave details of the credit union legislative agenda for the next year. According the CUNA Senior Vice President of Legislative Affairs, John Magill, the room was packed with congressional staff to hear the credit union message. “We had staffers up and down the seniority list,” Magill noted, “from chiefs of staff to legislative correspondents, from both sides of the aisle and representing offices from all across the country. Many of those attending were from offices of newly elected representatives--precisely who we hoped to reach.”

This week in Congress House considers Senate organizes

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WASHINGTON (1/25/11)--In the U.S. Congress this week, action of interest to credit unions will be concentrated in the House, while the Senate continues to pursue organizational tasks. The House Monday began consideration of a 2011 budget resolution (H.Res. 38), which is aimed at reducing federal spending to fiscal year 2008 levels, and work on that resolution is expected to continue today. That body is also scheduled to take up two bills under suspension of the rules today, one of which would extend funding authorization for U.S. Small Business Administration (SBA) lending programs until May 31. The funding would cover such SBA programs as its 504 guaranteed lending, which is set to expire on Jan. 31. Also of note in the House:
* The House Financial Services Committee meets today to organize for the 112th Congress. The committee is expected to consider resolutions establishing its rules and electing members to subcommittees. Nominations were made public last week; and * On Wednesday, House Financial Services, as reported earlier, has scheduled a hearing on "Promoting Economic Recovery and Job Creation: The Road Forward."
When the House adjourns on Wednesday, it is next expected to meet on Feb. 8. The Senate returns to session today and will resume debate on amendments to the Standing Rules of the Senate. Several changes to the Senate rules related to the filibuster, secret holds and nominations have been proposed. The Senate is expected to be in session next week.

DOJ should narrow Web-access rule says CUNA

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WASHINGTON (1/25/11)--While supporting the U.S. Department of Justice’s (DOJ) overall effort to ensure equal access by individuals with disabilities to the products and services of public accommodations, including credit unions, the Credit Union National Association (CUNA) recommends that the scope of a web-access proposal be pared down. A recent DOJ advance notice of proposed rulemaking (ANPR) addresses whether to require that the websites of public accommodations—that provide products or services to the public through such websites—be accessible to and usable by individuals with disabilities under the legal framework established by the Americans with Disabilities Act (ADA). In a comment letter to the agency, CUNA Assistant General Counsel Luke Martone wrote, “We believe that if a public accommodation (including credit unions) is offering a full range of online services to its customers/members through its website, it should be ADA-compliant for access to those services. “However, we believe that smaller accommodations that are simply offering a single online service, or a very limited number of services, should be afforded greater flexibility under web accessibility standards.” The CUNA letter encouraged DOJ to consider narrowing the scope of the web accessibility regulations to (non-credit union) online-only financial institutions. If DOJ applies the rule more broadly, CUNA asked the department to adopt flexible performance standards that would allow public accommodations to develop solutions capable of working effectively with their existing web frameworks. The trade group also asked that DOJ acknowledge the limited resources available to many credit unions, and allow at least 18 months from publication of the final rule for full-site compliance. The complete CUNA comment letter is available through the resource link below.

Inside Washington (01/24/2011)

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* WASHINGTON (1/25/11)--The Credit Union National Association (CUNA) backs a recent technical change by the National Credit Union Administration (NCUA) that formalizes a shift of responsibility of some chartering decisions to its new Office of Consumer Protection (OCP). However, CUNA seeks a one-year review of the change. At its December 2010 open board meeting, the NCUA adopted an interim final rule, effective Dec. 23, meant to incorporate into its rules the transfer of responsibility for the review and approval of certain types of credit union conversions from the Regional Directors to the director of the OCP. The OCP authority includes credit union conversions to mutual savings banks or mutual savings associations and the conversion from National Credit Union Share Insurance Fund insurance to non-federal share insurance. The NCUA action amended the definition of “regional director,” as it applies to the aforementioned types of credit union conversions, to include the OCP. CUNA, in a comment letter submitted Monday to the NCUA, wrote that the new definition is “consistent with the defined role of the director of the OCP.” However, the association asked that the NCUA to execute a one-time annual review of its action defining the role of the director of the OCP in the context of conversions to study if there were any unanticipated ramifications… * WASHINGTON (1/25/11)--The Credit Union National Association has promoted Michael Edwards to senior assistant general counsel. He previously was counsel for special projects. Luke Martone has been promoted to assistant general counsel from regulatory counsel … * WASHINGTON (1/25/11)--Rep. Randy Neugebauer (R-Texas), the chairman of the House Financial Services Oversight Subcommittee, said the Treasury Department’s Home Affordable Modification Program and other government-supported modification efforts have failed to help consumers and should be shut down. Neugebauer said the housing market must bottom out before a recovery can begin and government programs are preventing that process. He acknowledged his opinion may not be popular because some consumers would lose their homes, but he added that government programs just delay the inevitable: people who can’t afford homes in the long-term won’t be able to keep them anyway … * WASHINGTON (1/25/11)--Federal agencies are expected to formally discuss their various proposals for mortgage servicing reforms this week, but it remains unclear how they will resolve their differences. The Federal Deposit Insurance Corp.’s proposal includes servicing standards that would be included in the risk-retention rule agencies are writing. The latest proposal from the Office of the Comptroller of the Currency challenges that plan, calling for a stand-alone rule. The Federal Reserve Board is open to either option, and has sent a draft of servicing principles to Capitol Hill. State attorneys general and the Federal Housing Finance Agency are also contributing ideas to the process. All of the plans call for restrictions on servicing, but any proposal that includes a stand-alone rule servicing rule is at odds with the FDIC proposal. The FDIC plan would also create a special class of highly safe loans--known as "qualified residential mortgages"--that would be exempt from retention. Observers believe that the OCC’s proposal for a stand-alone rule could gain approval more quickly and cover more of the industry. The Fed’s principles include measures to address shortcomings in servicer operations and internal controls …