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Inside Washington (01/03/2013)

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  • WASHINGTON (1/3/13)--Regulators are close to a $10 billion settlement with 14 of the nation's largest banks that would end the government's efforts to hold lenders responsible for foreclosure abuses, The New York Times reported Monday. The deal would also likely put an end to recent warnings from independent consultants, the Government Accountability Office and lawmakers cautioning regulators that their foreclosure reviews were faulty, according to the American Banker (Jan. 2). A settlement could help resolve allegations of foreclosure mistakes and misconduct during the current review process, the Banker said. A random sampling of foreclosures showed that 11% of all foreclosures would require remediation payments or other compensation, Rep. Brad Miller (D-N.C.) and other members of Congress said during a 2012 hearing. Still to be determined is how regulators will distribute $3.75 billion in direct homeowner remediation payments …

Cheney identifies 2013 action agenda

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WASHINGTON (1/3/13)--Credit Union National Association (CUNA) President/CEO Bill Cheney Wednesday named the top priorities that will drive CUNA's action agenda in 2013.

"CUNA's 2013 priorities fall into three key categories: Protecting credit unions, easing their regulatory burden, and helping them prepare for the future," said the CUNA leader.

"Protecting the credit union tax exemption tops our list of ten 2013 priorities for good reason," Cheney said. "It is widely expected that comprehensive tax reform will be on the legislative agenda next year.

"As part of that process, the credit union tax status is likely to be examined and could come under significant threat--particularly since we know the banks will continue their paid media and lobbying barrage urging credit union taxation." (See related story: A closer look: CUNA sets four-pillar legislative agenda.)

Here is CUNA's list of top ten priorities for the year:

  • Protect and defend the credit union tax exemption;
  • Reduce credit union regulatory burden and improve their operating environment through both legislative and regulatory initiatives;
  • Ensure comprehensive compliance support;
  • Enhance the credit union charter to include such changes as increased member business lending authority and supplemental sources of capital;
  • Maintain marketplace flexibility and preserve credit unions' ability to set the price points that match the needs and capacities of their members;
  • Engage in housing finance reform;
  • Build credit unions' 'Plan to Win' and implement a system that will allow the passage of important pro-credit union legislation by adopting a "535-seat" strategy in which credit unions effectively reach out to all members of the U.S. Congress;
  •  Unveil a new "Strategic Vision" for the credit union movement;
  • Enhance communications to credit unions, consumers and the media; and
  • Work "hand-in-glove" with credit union leagues at the state level.
Starting with today's issue, News Now will feature an in-depth look at certain CUNA 2013 priorities.  Today's issue discusses legislative priorities in "A closer look: CUNA sets four-pillar legislative agenda." The Jan. 7 edition will feature details on CUNA's regulatory priorities. Additional features will follow.

CUNA, leagues are active as 113th Congress begins

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WASHINGTON (1/3/13)--The 113th U.S. Congress officially begins today as members are scheduled to be sworn in this afternoon, and the Credit Union National Association (CUNA) and state credit union leagues are already in action, welcoming new members and advocating for key credit union priorities as the 2013 legislative calendar begins.

CUNA representatives and members of credit union leagues from Missouri, North Carolina, Ohio, Texas and Kentucky will attend legislator open houses and swearing in ceremonies this week.

Organizational resolutions and other official business will likely be the only actions taken by the 113th Congress this week, and both the House and Senate are expected to be out of session next week. Both chambers are expected to return to work following the inauguration of President Barack Obama on Jan. 21.

There will be 14 new senators and 84 new House members in the new Congress. Some of the newly elelcted members of Congress incorporated increasing credit union member business lending (MBL) authority and other key credit union issues into their campaign platforms. Overall, the Credit Union National Association (CUNA) supported 388 candidates for the House and Senate in November's election, and in 96% of those races the credit union-friendly candidates won.

The return and influx of credit union-friendly candidates could boost MBL legislation progress during this session of Congress, said CUNA Senior Vice President of Political Affairs Richard Gose.

CUNA, the state credit union leagues, credit unions and members of Congress late last year backed MBL cap increase legislation as a way to help small businesses. House (H.R. 1418) and Senate (S. 2231) MBL bills gained strong support, earning 145 and 22 backers, respectively. Both bills will need to be reintroduced in this Congress.

The MBL bills would increase the 12.25%-of-assets credit union member business lending (MBL) cap to 27.5% of assets. 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.

Maintaining the credit union tax status, addressing housing finance reform issues, decreasing regulatory burdens faced by credit unions and increasing credit union access to supplemental capital are other key items for CUNA and credit unions during this session of Congress. (See related story: CUNA sets four-pillar legislative agenda for 2013.)

CUNA seeks comment on recent remittance changes

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WASHINGTON (1/3/13)--The Consumer Financial Protection Bureau (CFPB) late last month unveiled a series of revisions to its still-pending remittance regulation proposal, and the Credit Union National Association (CUNA) is seeking credit union comment on these changes through a new online survey and a comment call.

The recent remittance rule revisions are slight tweaks to CFPB-proposed remittance regulations.

The CFPB said the revisions would:
  • Provide increased flexibility and guidance with respect to the disclosure of taxes imposed by a foreign country's central government as well as fees imposed by a recipient's institution for receiving a remittance transfer in an account;
  • Require disclosure of foreign taxes imposed by a country's central government, but eliminate a previous requirement to disclose taxes imposed by foreign regional, provincial, state, or other local governments; and
  • Extend the remittance rule implementation period until 90 days after the revised final rule is released. The rule was scheduled to come into effect on Feb. 7.
These changes were among the revisions urged by CUNA in several meetings with the bureau.

The CUNA survey and comment call follow up a September CUNA release that sought comment on the broader CFPB remittance proposal. Deputy General Counsel Mary Dunn said CUNA took the unusual step of releasing a second comment call and survey due to the tight comment deadline the CFPB has imposed.

The agency is accepting comment on the remittance implementation period changes until until Jan. 15, and is accepting comment on the broader CFPB revisions until Jan. 30.

CUNA has asked credit unions to complete the remittance survey and respond to the Comment Call by Jan. 22. CUNA asks for comment on the delayed effective date by Jan. 11.

For the remittance survey and comment call, use the resource links.

A closer look: CUNA sets four-pillar legislative agenda

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WASHINGTON (1/3/13)--The Credit Union National Association (CUNA) will explore every option and take every opportunity to represent credit unions on Capitol Hill in 2013, said CUNA President/CEO Bill Cheney Wednesday as he unveiled CUNA's 2013 legislative priorities.

"It's time to take our substantial 2012 successes and continue to build a great future for credit unions," Cheney declared.

A key issue on CUNA's 2013 legislative priorities agenda is the preservation of the credit union federal tax status. The tax status is likely to be examined this year as the 113th U.S. Congress scrutinizes comprehensive tax reform. (See related story: Cheney identifies CUNA 2013 action agenda.)

Overall, the CUNA legislative agenda this year will have four pillars:  preserving the credit union tax status; reducing regulatory burden; engaging in housing finance reform; and advancing credit union charter enhancements, such as increased member business lending authority and supplemental capital.

The statutory credit union tax status provides credit unions with an exemption from federal income tax because of their cooperative business structure. CUNA and the state credit union leagues are prepared to wage a public advocacy campaign in support of current law. It will encompass a comprehensive and deliberate grassroots, communication and legislative strategy.

CUNA has always maintained that the statutory tax status is as relevant today as it was when granted. In 1917, the U.S. Attorney General--and later the U.S. Congress--exempted credit unions from a federal income tax obligation because of their organization structure: Credit unions are member-owned, not-for-profit financial cooperatives.

The exemption, in effect since credit unions' inception in the United States, has been reaffirmed many times, including in 1935, 1936, 1937, 1951 and 1998.

A second pillar of the CUNA legislative agenda: To address what CUNA has come to call the "crisis of creeping complexity" with respect to regulatory burden.

This is an area in which CUNA had a series of victories in 2012.  Despite the gridlock that gripped Washington throughout the year--right up to and through the "fiscal cliff" negotiations this week--CUNA was able to secure a number of regulatory relief measures. Some examples include:

  • The president signed a CUNA-supported bill into law Dec. 21 that eliminates a duplicative and burdensome requirement that a fee notice be posted on an ATM machine, in addition to the electronic notice that appears on the screen prior to the transaction. The dual requirement had  created legal and financial issues for some credit unions and other financial institutions; and
  •  Signed into law the same day was a CUNA-backed measure (H.R. 4014) intended to ensure that groups or individuals that supply information to the Consumer Financial Protection Bureau (CFPB) would not waive their right to privacy protections.
The remaining two of CUNA's four legislative pillars are engaging in housing finance reform and advancing charter enhancements.

Working with its Housing Finance Reform Task Force, CUNA is prepared to deeply engage with Congress' efforts to reform Fannie Mae and Freddie Mac, expected to be a top priority of House Financial Services Committee Chairman-designate Jeb Hensarling (R-Texas).

CUNA will continue to pursue charter enhancements that improve the operating environment for credit unions. Two major initiatives that remain as priorities from 2012 are supplemental capital and increased member business lending.

For supplemental capital to advance, CUNA and the leagues will continue to educate and generate support for the issue within the credit union system and raise it in the context of Congress' consideration of bank capital issues, such as Basel III rules. 

In 2012 CUNA supported H.R. 3993, which would modify the definition of credit union net worth to include supplemental forms of capital for credit unions. It was referred to the House Financial Services subcommittee on financial institutions and consumer credit for consideration.

CUNA and the leagues also will work to continue progress of legislation in both the House and Senate that would increase the credit union member business lending cap to 27.5% of assets, up from 12.25%. MBL bills (H.R. 1418/S. 2231) enjoyed strong support in both chambers with 145 backers in the House and 22 in the Senate.  

In 2013, CUNA intends to seek the reintroduction of legislation in both chambers to permit experienced credit unions to continue to lend to their small business members. (See related story: CUNA, leagues are active as 113th Congress begins.)

NCUA to offer Jan 24 HMDA webinar

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WASHINGTON (1/3/13)--Ways to avoid common errors found on Home Mortgage Disclosure Act (HMDA) Loan Application Register (LAR) forms, form preparation tips, and management issues impacting credit unions that file the LARs will all be addressed during a Jan. 24 National Credit Union Administration (NCUA) webinar.

The webinar, entitled "HMDA: Accuracy and Timeliness," is scheduled to begin at 2 p.m. ET on Thursday, Jan. 24.

The NCUA Office of Consumer Protection will join Federal Reserve Board experts during the webinar to:

  • Address common errors identified in HMDA LAR data and submissions;
  • Provide tips for preparing and submitting accurate and timely HMDA LARs; and
  • Discuss financial institution management responsibilities in the HMDA process.
The NCUA is accepting questions ahead of the webinar. Questions can be submitted to The agency asks that participants use "HMDA Webinar" in the subject line of their submitted questions.

To register for the webinar, use the resource link.

With banner 2012, CULAC looks forward

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WASHINGTON (1/3/13)--The Credit Union Legislative Action Council (CULAC) had a banner year in 2012, raising more than $2 million to support credit union-friendly candidates, Credit Union National Association (CUNA) Senior Vice President of Political Affairs Richard Gose reported Wednesday. CULAC is CUNA's political action committee (PAC).

The $2 million funding total is the largest single-year total recorded by CULAC, and it shows that credit union supporters nationwide are "fired up and ready to support credit union candidates," Gose said. CULAC raised a total of $3.93 million in 2011 and 2012, combined, for the two-year election cycle.

Gose said CULAC aims to maintain its growth momentum going into the next electoral cycle. CULAC's goal is to have more resources for its independent expenditures and partisan communications going forward, he added.

Altogether, CUNA, CULAC and state credit union leagues spent $4.15 million to support pro-credit union candidates in the 2012 federal elections. Nearly $1 million of those funds went to independent expenditures leading up to the November elections, and CULAC spent $3 million on candidate contributions. CUNA and leagues also spent more than $300,000 in additional funds to support partisan communications.

CUNA and CULAC supported candidates in 361 U.S. House races and 33 U.S. Senate races, and in 96% of those races the credit union-friendly candidates won.

CULAC was the most bipartisan PAC in's list of the top 20 PAC contributors for the 2012 elections, with funding nearly evenly divided between the two major parties.

Advocacy efforts made in 2012 took on several forms, including radio advertising, direct mail, and CUNA's first forays into new media political advocacy. These new media efforts included demographically targeted online advertising on web-based media platforms such as social media site Facebook, online radio site Pandora, and banner or sidebar ads on various websites. Candidates also received search-based advertisement placement through Google's AdWords product.

Dan Maffei (D-N.Y.), Chris Collins (R-N.Y.) and Iowa candidate Kristie Vilsack (D) received the new media support, and while these online projects represented a small portion CUNA's overall independent expenditure budget, "they were another worthy avenue to educate voters and mobilize and activate supporters for our candidates," CUNA Vice President of Political Affairs Trey Hawkins said.

Senate confirms Treasury OFR director

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WASHINGTON (1/3/13)--The U.S. Senate this week confirmed Richard Berner to serve a six-year term as the U.S. Treasury's first Office of Financial Research (OFR) director.

Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said CUNA plans to meet with Berner soon.

Berner was approved by a voice vote on Jan. 1. He has served as Counselor to the Secretary of the Treasury since April 2011, helping Treasury Secretary Tim Geithner set up the OFR.

The OFR was set up under the Dodd-Frank Wall Street Reform Act and is charged with helping regulators avoid any future systemic crisis by measuring risk and monitoring how the financial system is evolving.

Geithner on Wednesday said Berner has been instrumental in laying the groundwork for the OFR to support Wall Street reform, including improving financial data and serving the Financial Stability Oversight Council.

The OFR held its inaugural advisory committee meeting last month. In that initial meeting, the committee asked financial industry players how it can improve collection and analysis of financial data to detect systemic threats.