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Washington Archive

Washington

Cheney Report Previews the Busy Year Ahead

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WASHINGTON (12/30/13)--A busy 2014 is shaping up for credit unions, and Credit Union National Association President/CEO Bill Cheney details the full plate that lies ahead in this week's edition of The Cheney Report.

CUNA priorities in 2014 will include protecting credit unions, obtaining regulatory relief and enhancing the credit union charter, Cheney wrote. Other top issues include:
  • Continuing the national conversation about the credit union tax status and the value credit unions bring to the financial marketplace, and how their tax status helps support good public policy, through grassroots outreach and education efforts;
  • Containing any new unnecessary or burdensome regulation from any agency, including the National Credit Union Administration and the Consumer Financial Protection Bureau;
  • Ensuring that credit unions are fully prepared for the new regulations set to take effect in 2014;
  • Stressing that on risk-based net worth, case-by-case judgment is better, and urging NCUA to focus on addressing problems at the individual institution level rather than under a broader rulemaking approach;
  • Urging NCUA to work with the credit union system to continue to support statutory capital reform;
  • Addressing ongoing concerns with examiner directives that seem arbitrary and highly subjective;
  • Advising against additional corporate assessments;
  • Ensuring credit union access to the secondary market is maintained;
  • Working to increase authority for member business lending;
  • Seeking forms of supplemental capital for credit unions; and
  • Helping the credit union movement to "Unite for Good."
"And all of this is just for starters. No doubt, as the year progresses, more issues will come our way, and more challenges will be presented to all of us," Cheney wrote.

For the full Cheney Report, use the resource link.

CU Impact Must Be Considered in FHFA Oversight, CUNA Tells Watt

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WASHINGTON (12/30/13)--The Credit Union National Association has encouraged incoming Federal Housing Finance Agency Director Rep. Mel Watt (D-N.C.) to ensure balanced oversight of Fannie Mae and Freddie Mac that fully considers the impact actions will have on credit unions.

CUNA President/CEO Bill Cheney made these remarks in a letter sent to Watt last week.

In that letter, the CUNA CEO said credit unions are looking forward to working with Watt, and also urged him to do all he can to ensure that:
  • Fannie and Freddie are accountable for the policies they implement;
  • The process for developing policies is transparent;
  • Policies adopted and implemented will support small sellers and services; and
  • CUNA and other stakeholders will be included in discussions with the FHFA as policy concerns arise and solutions to address those concerns are developed.
Cheney said CUNA would like to have a solid, working relationship with the agency on a range of issues, including fair access. The CUNA letter also highlighted concerns regarding policies and other developments, including:
  • Uncertainty as to whether non-qualified mortgage loans will be purchased by the government-sponsored enterprises after January;
  • Uncertainty regarding the continuation of loan guarantees and whether guarantee fees will be further increased;
  • Requiring a seller/servicer to be accepted by the other GSE before allowing it to sell, own or service them;
  • Making it difficult for new seller/servicers to be approved or approved in a timely manner;
  • Requiring a credit union servicer to use a sub-servicer; and
  • The ongoing failure by the GSEs to reflect the low level of default and delinquency of credit union mortgages in the pricing that is offered to credit union sellers.
The CUNA letter also urged Watt to withdraw proposed loan purchase limit reductions.

Watt is scheduled to be sworn in as FHFA director on Jan. 6.

CUNA, Coalition Partners Added to Jan. 17 Interchange Oral Arguments

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WASHINGTON (12/30/13)--The Credit Union National Association and its partner members of The Clearing House coalition will be in court Jan. 17 to present 10 minutes of oral arguments in the ongoing debit interchange case known as NACS, et al. v. Board of Governors of the Federal Reserve System.

The court ruled Friday that CUNA and TCH members will be allowed to present their views, along with the Fed and the merchants group, during the already-scheduled oral arguments for the Fed's appeal to uphold its rule. The Fed is assigned 15 minutes for oral arguments and the merchants have 25 minutes.
 
In this case, a merchants' coalition has challenged the Fed's implementation of a Dodd-Frank Act-imposed debit interchange cap as too high. CUNA and its partner maintain that the cap, in fact, is too restrictive.
 
CUNA and it financial services partners have argued that the Fed cap does not factor in enough of the costs that card issuers face for providing their services.
 
"(T)he statute states clearly that the full 'cost' incurred by an issuer 'with respect to' an electronic debit transaction may be recovered through an interchange fee," CUNA noted in an earlier amicus brief.
 
The current Fed debit interchange fee cap  limits fees for issuers with assets of $10 billion or more to 21 cents, and allows an additional five basis points per transaction to be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards.

The interchange regulations, overturned by a lower court, remain in effect as the court case moves forward on the Fed's appeal.

Circuit Judges David Tatel, Harry Edwards, and Stephen Williams will hear the appeal.

CUNA's partners in TCH coalition are the: American Bankers Association, Consumer Bankers Association, Electronic Payments Coalition, Financial Services Roundtable, Independent Community Bankers of America, Midsize Bank Coalition of America, National Association of Federal Credit Unions, and National Bankers Association.

CUNA Seeks Comment on Proposed Fed Payment System Changes

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WASHINGTON (12/30/13)--Credit unions can now comment on how the Federal Reserve's proposed changes to its Payment System Risk Policy, and related changes to Regulation J, could impact their business practices in a new Credit Union National Association regulatory call to action.

The proposed Fed changes would move the posting of automated clearinghouse (ACH) debits processed by the Fed banks' FedACH service overnight to 8:30 a.m. (ET) from 11 a.m. (ET) to align with the posting of ACH credits. The proposal would also move the posting time for receiving most commercial check credits for deposits and debits for presentments to 8:30 a.m. (ET) and establish two other posting times of 1 p.m. (ET) and 5:30 p.m. (ET), and make other related changes.

CUNA is seeking details on how these proposed changes would impact credit union operations, payments processing and account management with the Fed banks.

CUNA will accept comment until Jan. 13. To comment, use the resource link.

CUNA CompBlog Provides Target Breach Response Tips

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WASHINGTON (12/30/13)--Helping credit unions respond to the massive Target data breach with compliance requirements is the aim of the latest posting on the Credit Union National Association's CompBlog, the daily blog for compliance information and developments.

In a new CompBlog post, CUNA Senior Vice President for Compliance Kathy Thompson reminds that Section 748 of National Credit Union Administration regulations require federally insured credit unions to have a security program that contains a provision for responding to instances of unauthorized access to "sensitive" member information.

When sensitive information is accessed by unauthorized outsiders, credit unions must investigate to quickly determine the likelihood that the information has been or will be misused. Sensitive information includes a member's name, address, or telephone number, in conjunction with the member's Social Security number, driver's license number, account number, credit or debit card number, or a personal identification number or password that would permit access to the member's account, she notes.

"The Target breach is clearly an incident triggering compliance procedures," Thompson says.

NCUA guidance states that credit unions should have procedures in place to:
  • Assess the nature and scope of the incident, and identify what member information systems and types of member information have been accessed or misused;
  • Notify the appropriate regulator and inform it of the impact of the breach on the credit union's operations;
  • Notify appropriate law enforcement authorities;
  • File a timely Suspicious Activity Report in situations involving federal criminal violations requiring immediate attention. Credit unions should also report incidents of possible fraud to their insurers and Visa and MasterCard;
  • Contain and control the incident and prevent further unauthorized access to or use of member information;
  • Monitor, freeze or close affected accounts and preserve records and other evidence; and
  • Notify members, when warranted.
Many credit unions are asking whether there is required language that must be included in notifications sent to members. The answer is "no," Thompson says: There are no specific federal regulatory procedures on how and when the notification must be sent.

It is best to notify everyone who might possibly be affected as soon as possible and in a reasonably effective way.

"Yes, we know that individual members are far more likely to know if they actually bought something at Target using their debit or credit card since Black Friday, and should already be monitoring their accounts--but regulators will expect credit unions to be proactive and alert their members," she adds.

For the full blog post, use the resource link.