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Cheney Report: Reasons To Stay Tough On CU Tax Status

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WASHINGTON (10/7/13)--The federal government's current shutdown may mislead some into thinking nothing will happen on tax issues this year, but Credit Union National Association President/CEO Bill Cheney in this week's Cheney Report urges credit unions to keep up tax status advocacy effort.

Banks continue to carp, trying to overturn the credit union tax status.  Also, Cheney notes, there is talk in Washington that with a federal debt ceiling deadline looming, "grand fiscal bargain" legislation could be developed by congressional leaders, which that could include tax reform, although, so far, nothing has emerged.

CUNA has urged credit unions to remember that "advocacy is a long game" and they need to remain engaged.

One way credit unions can show their value right now, Cheney said, is by promoting the good work they are doing on behalf of members impacted by the shutdown. "From across the nation, credit unions have launched innovative programs and products to be sure that their members employed by the federal government, or relying on government contracts, would have the financial resources the needed as they faced the reality of furloughs and delayed payments due to the shutdown," Cheney wrote.

He cited bridge loans at little or no interest, no-charge financial counseling, 0% lines of credit equal to one month's net payroll, loan restructurings, signature loans, skip-a-pay and zero-interest payroll advance loans as examples of the many products and services credit unions are offering their members.

CUNA has shared these examples with the press, and Cheney encouraged credit unions to shout loud the services they are extending to their members and share their stories on CUNA's uniteforgood.org. "Let everyone see how credit unions are serving their members," Cheney said.

The Cheney Report also features:
  • Details on CUNA testimony during a Consumer Financial Protection Bureau hearing on the CARD Act; and
  • A briefing on CUNA's mid-week Don't Tax My Credit Union online rally.
Use the resource link to read the latest in The Cheney Report.

CUNA Backs 'Timely' Reg D Study

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WASHINGTON (10/7/13)--The Credit Union National Association has thrown its support behind a new bill introduced by Reps. Robert Pittenger (R-N.C.) and Carolyn Maloney (D-N.Y.). The legislation would order the U.S. Government Accountability Office (GAO) to study the impact of the Federal Reserve Board's monetary reserve requirements on depository institutions, consumers and monetary policy.

The reserve requirements are implemented by the Fed's Regulation D, and the new bill (H.R. 3240) is entitled, the "Regulation D Study Act." Credit unions became subject to monetary reserves in 1980.

CUNA supports improvements to Regulation D, such as increasing the number of automatic transfers allowed from a member's savings to share accounts and has testified before the U.S. Congress in support of such changes.

In a letter Friday, CUNA President/CEO Bill Cheney wrote, "Regulation D impacts credit union members by limiting by regulation (rather than as a business decision of the credit union) the number of withdrawals from a member's savings account to six transactions per month."

Calling the introduction of H.R.  3240 "timely," Cheney wrote, "A GAO study will allow an objective assessment of whether the rarely changed monetary reserves imposed on depository institutions and consumers are necessary in order for the Fed to implement monetary policy in the 21st century."

The bill instructs the GAO to consult with credit unions and community banks as it examines, and reports within one year of enactment, on the following:
  • An historic overview of how the Fed has used reserve requirements to conduct monetary policy;
  • The impact of the maintenance of reserves on depository institutions, including the operations requirements and associated costs;
  • The impact on consumers in managing their accounts, including the costs and benefits of the reserving system; and
  • Alternatives to required reserves the Fed may have to effect monetary policy.

CUNA Seeks CU Comment On HUD QM Definition

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WASHINGTON (10/5/13)--What factors should the U.S. Department of Housing and Urban Development (HUD) take into consideration as it sets points and fees limits for its pending qualified mortgage (QM) definition? Credit unions can take on this and other questions in a new Credit Union National Association comment call.

HUD is required under the Dodd-Frank Act to issue its own qualified mortgage rule, separate from the one issued earlier this year by the Consumer Financial Protection Bureau (CFPB). Once finalized, HUD's WM rule will replace the CFPB's QM definition for Federal Housing Administration (FHA) loans or certain other HUD insured loans. HUD expects to finalize and have its QM rule become effective on Jan. 10, at the same time as the CFPB's QM rule takes effect.

The HUD definition would be similar to the CFPB definition, with some distinct differences. For instance, HUD's proposed rule does not have a debt-to-income ratio requirement.

HUD's proposed rule would:
  • Require FHA streamlined refinances to comply with the rule;
  • Modify the CFPB's rebuttable presumption standard to clarify that a presumption is rebutted if the lender does not meet the underwriting requirements applicable to the transaction;
  • Maintain the existing regulatory structure for FHA-insured single-family mortgage programs for purposes of defining qualified mortgages, but augment these programs with certain features;
  • Define all FHA-insured single-family mortgages to be qualified mortgages, except reverse mortgages insured under HUD's Home Equity Conversion Mortgage (HECM) program; and
  • Incorporate safe harbor and rebuttable presumption standards into its own definition of qualified mortgage.
HUD is seeking comment from lenders participating in its programs on any issues specific to HUD's mortgage insurance and loan guarantee programs. Many of these issues are addressed in the CUNA comment call.

Other topics addressed in the comment call include:
  • Whether lenders participating in HUD's mortgage insurance and loan guarantee programs would lower the annual percentage rate relative to the average prime offer rate; and
  • Whether lenders would always opt for the safe harbor QM rule, and never make a rebuttable presumption QM, and what views credit unions have on the effect that this incentive may have on lenders, borrowers and the broader economy.
CUNA is accepting comments until Oct. 15. Comments are due to HUD by Oct. 30.
For the full comment call, use the resource link.

Mark Your 2014 Calendar: NCUA Releases Meeting Schedule

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ALEXANDRIA, Va. (10/7/13)--The National Credit Union Administration Friday released its 2014 board meeting schedule.

The first meeting of 2014 is set to be held on Jan. 23.

Monthly meetings are scheduled to follow on:
  • Feb. 20;
  • March 20;
  • April 24;
  • May 22;
  • June 19;
  • July 31;
  • Sept. 18;
  • Oct. 23;
  • Nov. 20; and
  • Dec. 18.
All meetings are scheduled to begin at 10 a.m. (ET).

As usual, there will be no August board meeting.

The agency said the 2014 schedule could be subject to change.

The NCUA in 2012 cancelled three of its monthly open board meetings, and the Credit Union National Association at that time supported the decision. "Any time a regulator avoids issuing new rules, it is a positive development," CUNA Deputy General Counsel Mary Dunn said.