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MBL Cap Increase Would Boost Small Biz Cash Access, CUNA Says

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WASHINGTON (12/9/13)--Credit unions share the U.S. House Small Business Committee's goal of increasing small business access to capital through the reduction of statutory and regulatory impediments. The Credit Union National Association suggested several ways that access could be improved, including increasing the member business lending cap, in a letter sent to committee members last week.

The letter was sent for the record of a Small Business subcommittee on economic growth, tax and capital access hearing entitled "Where Are We Now? Examining the Post-Recession Small Business Lending Environment."

In the letter, CUNA noted that "businesses want and need access to capital, but are experiencing difficulty and frustration when they approach their financial institution and discover that capital is not easily accessible, even if the business is successful."

Credit unions, CUNA said, "are well capitalized and exist to serve the financial needs of their members...Allowing the free market to function by removing the restrictions on the business lending portfolios of credit unions, will inject more capital in the market place and encourage growth in businesses and the communities in which they operate."

The letter spoke in support of the Credit Union Small Business Jobs Creation Act (H.R. 688), which would increase the MBL cap from 12.25% of assets to 27.5%. CUNA has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

"The bank lobby opposes this bill because they oppose credit unions; their arguments are without merit. The bill will not endanger the small banks in your community; the bill will not alter the nature or focus of credit unions; the bill is not inconsistent with the credit union mission or the purpose of their tax status," CUNA wrote.

Other suggestions for improving capital access include:
  • Treating non-owner occupied one to four family dwelling loans as real estate loans;
  • Increasing the de minimis credit union business loan amount to $500,000;
  • Encouraging small business development in underserved, urban and rural communities;
  • Excluding MBLs made to non-profit religious organizations from the MBL cap;
  • Fully exempting government guaranteed business loans from the MBL cap;
  • Enabling full credit union participation in the U.S. Small Business Administration's Section 504 program; and
  • Reducing the loan loss reserve requirement of the SBA's microloan program.
For the full CUNA letter, use the resource link.

Cheney Report: CUs' Vigilance Against Tax Attacks Must Include State Actions

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WASHINGTON (12/9/13)--While tax reform talk may soon subside in Washington over the holiday break, Credit Union National Association President/CEO Bill Cheney said credit unions must remain vigilant, as "attacks on our tax status in the states show no sign of letting up."

In this week's edition of The Cheney Report, Cheney noted that House Ways and Means Committee Chairman Dave Camp (R-Mich.) last week told reporters that tax legislation is unlikely to emerge from his committee before year's end, and that he would likely hold off unveiling a tax reform bill until February or March. CUNA Senior Vice President of Legislative Affairs Ryan Donovan said both parties agree on the need for tax reform, "but when you get down to the details, you see they are still pretty far apart." Republicans, Donovan said, oppose tax increases, but Democrats insist that new revenues are part of the discussion.

Cheney said the delay of federal tax proposals is "not stopping attacks by bankers in states such as South Dakota, which has been weekly fending off 'tax resolutions' against our tax status brought by bankers on a county-by-county basis."

In CUNA's view, the South Dakota attacks are part of a trend: Other threats have emerged in Illinois and in other states. One member of the House Ways and Means Committee, Rep. John Larson (D-Conn.), said "vigilance is eternal" in credit unions' campaign to maintain their tax status. Larson made his remarks in a video arranged by the Connecticut Credit Union League. (See Dec. 5 News Now story: Rep. Larson Urges CUs to Remain Vigilant in Tax Status Advocacy: Camp Says No Bill in 2013.)

CUNA continues to encourage credit unions to use CUNA and state credit union league resources, social media sites including Facebook, and micro-video site Vine, to tell their legislators, "Don't Tax My Credit Union!" Credit union and member tax advocacy efforts have remained strong. Almost 1.2 million separate congressional contacts have been made since mid-May to support credit unions in ongoing tax talks.

This week's Cheney Report also includes:
  • The results of a recent House hearing on regulatory relief legislation;
  • A call for comments in CUNA's new exam survey; and
  • Details on CUNA's efforts to expand the compliance window for pending Consumer Financial Protection Bureau mortgage measures.
Use the resource link to read the latest in The Cheney Report.

CUNA's Schenk Discusses Economic Recovery in Wash. Post

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WASHINGTON (12/9/13)--The U.S. economy is "not all the way back to normal, but it's getting there," Credit Union National Association Vice President of Economics and Statistics Mike Schenk told The Washington Post last week.

Schenk's comments were incorporated into coverage on new U.S. Department of Labor numbers which show the U.S. economy added 203,000 jobs in November. The unemployment rate also fell to 7% during that month, and around 455,000 employees joined the workforce, the department reported.

"Given the headwinds in the federal government sector, it's pretty impressive overall," Schenk said. He noted he expects the economy to expand at a 3% rate in 2014.

Secretary of Labor Thomas Perez noted the November employment report continues the 45-month trend of private-sector job growth, with 8.1 million new jobs created over that time.

"In the last 12 months alone, American businesses have added 2.3 million new private-sector jobs. This puts the American economy in a strong position heading into the December holiday season," Perez said.

For the full Washington Post item, use the resource link.

ACLU Suit Seeks FHFA Eminent Domain Details

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WASHINGTON (12/9/13)--The American Civil Liberties Union and the Center for Popular Democracy last week filed suit against the Federal Housing Finance Agency, seeking information on that agency's financial industry ties and its alleged "efforts to block municipalities from using eminent domain to prevent foreclosures."

The suit, which was brought under the Freedom of Information Act, was filed in the U.S. District Court for the Northern District of California.

The city of Richmond, Calif., this summer sent notice to holders of more than 620 mortgages, asking them to sell their loans to the city for 80% of the homes' fair value. The city then would write them down, and help the homeowners refinance their loans. If the offers aren't accepted, the city said it would use eminent domain to seize the loans at a value determined by a court.

Following these notices, the FHFA and Freddie Mac said they were considering taking legal action against the city of Richmond. The FHFA has expressed concern that losses resulting from such programs would ultimately be paid for by taxpayers.

The Credit Union National Association supports a broad range of programs to assist struggling homeowners and their communities, but believes that "using the power of eminent domain in this manner would harm our nation's housing markets and the very communities it is intended to help."