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California Reps. Unite For CU Tax Status

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WASHINGTON (10/28/13)--A bipartisan group of 11 freshman U.S. House members from California joined the lengthening list of credit union tax status supporters in Congress late last week.

In a joint letter to House Ways and Means Committee Chairman Dave Camp (R-Mich.) and ranking member Sander Levin (D-Mich.), the legislators encouraged committee leadership to maintain the credit union tax status as they discuss potential tax reforms this year.

Camp and Senate Finance Committee Chair Max Baucus (D-Mont.) remain committed to tax reform, and tax code changes will likely be one of the items discussed as budget tweaks are debated. The budget agreement that reopened the government requires congressional leaders to name conferees to a budget conference committee that would issue recommendations by Dec. 13.

"Ensuring the credit union tax exemption guarantees the choice in financial services for our consumers, our constituents, and our communities," the legislators wrote. "Credit unions are inherently different from other financial institutions because of their mission and their focus on members," and have played a vital role in the California economy, "where the economic conditions of the last five years have been challenging," they added.

The letter was cosigned by longtime credit union supporters Reps. Jared Huffman (D) and Col. Paul Cook (R), Ami Bera (D), Julia Brownley (D), Tony Cardenas (D), Doug LaMalfa (R), Alan Lowenthal (D), Scott Peters (D), Eric Swalwell (D), and Mark Takano (D). These legislators are also supporters of legislation that would increase the credit union member business lending cap.

Rep. Raul Ruiz (D) also signed on to the letter. This is the first time he has publicly supported credit unions since becoming a member of the House.

"This is another example of how the California Congressional delegation continues to show their strong support for credit unions," said Jeremy Empol, vice president of federal government affairs for the California and Nevada Credit Union Leagues.

In recent days, Credit Union National Association President/CEO Bill Cheney, General Counsel Eric Richard, Deputy General Counsel Mary Dunn, Chief Economist Bill Hampel and Senior Vice President for Legislative Affairs Ryan Donovan have met with White House and Treasury officials to advocate for the continuation of the credit union tax exemption.

CUNA has provided a host of Take Action tools on www.DontTaxMyCreditUnion.org to help credit union supporters back the tax status. Supporters have spoken up by sending tweets, pictures, vine videos, and e-mails to their members of Congress, all with the #DontTaxMyCU hashtag.

Rep. Michaud To NCUA: Limit CU Burdens

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WASHINGTON (10/28/13)--Rep. Michael Michaud (D-Maine) has urged federal regulators to "consider the unintended consequences of a 'one size fits-all' regulatory approach, and to the extent practicable, exempt or alleviate unnecessary burdens on credit unions."

Michaud made his case against regulatory burden on credit unions in letters sent last week to Consumer Financial Protection Bureau Director Richard Cordray and National Credit Union Administration Chairman Debbie Matz.

"Credit unions did not engage in the abuses and risky practices that led to the financial crisis. I am concerned that the implementation of financial reforms is becoming disproportionately burdensome on credit unions, particularly the smaller community-based institutions, and leading to the consolidation of institutions," Michaud wrote.

Regulatory costs are particularly burdensome for smaller institutions, and every dollar a credit union spends on compliance reduces the amount available to serve their members, he said.

The federal lawmaker noted that "credit unions play an important role in states, towns and municipalities across the nation," and said many have deep ties in the communities they serve. "Credit union's local ties have long prevented excessive risk taking, and their structure has allowed them to remain a well-capitalized source of financial stability both during and following the financial crisis," he added.

Michaud encouraged Cordray and Matz to take these factors into account as they regulate, oversee and examine credit unions.

"Examination practices should be consistent from one to the next and should give credit unions the reasonable flexibility to serve their members' needs. Standards and rules developed for the largest and most complex financial institutions do not always make sense for credit unions," he added.

Maine Credit Union League President John Murphy in a release said Michaud "understands the important and significant role of credit unions, and that the burden of over regulation is impacting a credit union's ability to serve their members." The league appreciates "his initiative and advocacy on behalf of credit unions on this important issue," Murphy added.

For the full letter, use the resource link.

Cheney Report Launches Weekly Showcase For CU Stories

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WASHINGTON (10/28/13)--In this week's edition of The Cheney Report, Credit Union National Association President/CEO Bill Cheney highlights how credit unions in Kansas and Montana have united for good and come together to benefit their communities.

In one example, Cheney tells how Trico Community FCU, Helena, Montana, worked with a local engineering firm. The two organizations donated $6 to the Montana's Children Miracle Network Hospital for every run scored in the 2013 season by a local baseball team.

Another story comes courtesy of the Kansas Credit Union Association: That group hosted their third 'Make a Difference' event this year, in which 17 local credit unions came together and surprised 900 community members at 11 different locations by giving away $23,000 worth in cash, gift cards and free gas.

CUNA is collecting these stories to showcase how credit unions are joining forces to Unite for Good, and similar stories will be featured each week in The Cheney Report. Cheney encouraged credit unions to visit UniteforGood.org and share how they are helping reach CUNA's shared, strategic vision in which Americans choose credit unions as their best financial partner.

This week's Cheney Report also includes:
  • Details on legislation that would make it more affordable for credit unions and other smaller financial institutions to combat patent trolls;
  • CUNA's concerns about the impact of "qualified mortgages" on credit union fair lending standards;
  • News from CUNA's recent credit union tax status talks with Obama administration representatives; and
  • The results of last week's National Credit Union Administration open board meeting.
Use the resource link to read the latest in The Cheney Report.

NCUA Letters Detail Liquidity, E-Filing Regs For CUs

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ALEXANDRIA, Va. (10/28/13)--In a pair of Friday letters to credit unions, the National Credit Union Administration provided details on two final rules approved at the October open board meeting: emergency liquidity and contingency plans and e-filing regulations.

"Guidance on How to Comply with NCUA Regulation §741.12 Liquidity and Contingency Funding Plans" (13-CU-10) is the first of the two letters. That rule, which is scheduled to become effective on March 31, will set up three-tiered emergency liquidity requirements for credit unions with less than $50 million in assets, between $50 million and $250 million in assets, and more than $250 million in assets.

Topics addressed in the letter include:
  • What credit unions need to do to comply with the rule, and when;
  • What steps credit unions should take before and after the effective date of the rule;
  • Why the NCUA developed and released the rule;
  • The key sources of liquidity the NCUA looks for in credit union plans;
  • What written liquidity policies should address; and
  • What a credit union's contingency funding plan should address.
In the e-filing letter, "​Electronic Filing of Call Reports and Extended Filing Dates for 2014" (13-CU-11), the agency covers the why and when of that new rule. The final e-filing rule approved by the agency will require all federally insured credit unions to file financial, statistical, and other reports and credit union profiles electronically using the NCUA's information management system or other electronic means specified by the agency.

To help credit unions cope with these changes, the NCUA has adjusted its call report and profile submission due dates to the fourth Friday of each month following the end of a quarter. The specific due dates for 2014 are now Jan. 24, April 25, July 25 and Oct. 24.

If a credit union does not file electronically by the due date, it is a regulatory violation subject to applicable administrative remedies, including civil money penalties, the NCUA letter reminds.

For both NCUA letters to credit unions, use the resource link.