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Udall endorses MBLs as JOBS Act amendment

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WASHINGTON (3/15/12)--Sen. Mark Udall (D-Colo.) made an appeal to his colleagues in the U.S. Senate yesterday urging them to include a member business lending (MBL) amendment in legislation currently under consideration, the Jumpstart Our Business Startups (JOBS) Act.  However, it has been indicated that Senate leadership will severely restrict amendments to the bill.

Udall is the sponsor of a Senate bill that, like its House counterpart, would increase credit union business lending authority to 27.5% of assets, up from the current limit of 12.25%.

On the Senate floor during debate on the JOBS Act, Udall urged his Senate colleagues to allow credit unions to do more to help small businesses grow and create jobs through increased MBL authority.

He noted the stories of Coloradoans who were turned away by banks when they sought additional capital for their small businesses, but who were offered the needed bridge loans by their credit unions to subsequently grow and add new jobs to their communities.

Noting bankers' opposition to an increase in MBL authority for credit unions, Udall said, "This isn't about banks or credit unions.  This is about small businesses."

Udall said the problem with the JOBS Act is that Congress is "leaving the little guy behind."  He added that his MBL amendment would be the only piece of the JOBS Act that would help small businesses and create jobs. He underscored that credit unions stand ready and able to help small businesses grow and are being hindered by the government cap on loans.

The JOBS bill, which was passed by the House last week, would, in large part, allow companies to raise capital from larger pools of small investors, and lift Securities and Exchange Commission restrictions on advertising for news investors.

It was widely reported that House Minority Leader Nancy Pelosi (D-Calif.), who voted for the package, called it "so meager."

Credit Union National Association Executive Vice President John Magill Wednesday night lauded Udall's effort to attach MBLs to the JOBS Act. But, he added, there will be other, must-pass  bills throughout the year that could lend themselves as an MBL vehicle if needed.

The Senate vote on the JOBS Act is expected as early as today. However, as The National Journal reported this morning,  the bill received strong cricism from some Democratic senators during late debate last night casting some doubt over the future of a vote. The bill was criticised for removing what its critics called important investor protections.

CUs have packed Hill agenda during CUNAs GAC

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WASHINGTON (3/15/12)--More than 4,000 credit union advocates from across the country are preparing to bring the credit union message to Washington during next week's Credit Union National Association (CUNA) Governmental Affairs Conference (GAC), and the usual Hike the Hill visits, which are a key element of the GAC, will be more important than ever with around 1,000 bankers also lobbying members of Congress that week.

Credit union advocates will meet with legislators and staff at all 535 offices of the U.S. Congress during the week, and key credit union issues, including the need for an increased credit union member business lending cap and greater access to supplemental capital, are on the agenda for these meetings. The regulatory burden faced by credit unions, which has become worse for credit unions through the financial crisis, will also be addressed, Ryan Donovan, CUNA senior vice president of legislative affairs, said.

Housing finance reform and cyber security issues are also high on the list of congressional priorities at the moment, and credit unions will have the chance to ensure they remain part of these conversations going forward by advocating their positions in their meetings next week.

While this year's GAC is later than the usual February dates, Donovan said the timing will be prefect for credit unions, as Congress enters the last significant work period before the 2012 elections begin.

Congress remains gridlocked on several issues, but the direct advocacy opportunity provided by the GAC gives credit unions a chance to break through the gridlock and ensure their voices are still heard by their elected representatives, Donovan added.

Credit union advocacy issues will be addressed in a Monday GAC briefing by CUNA staff, and Donovan also discussed CUNA's GAC plans in a recent interview.

For more on the GAC, use the resource link.

Texas CUs testify on top issues

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SAN ANTONIO, Texas (3/15/12)--The current 12.25% of assets credit union member business lending cap "is obstructing a crucial source of capital to small businesses at a time that it's desperately needed," Maria Martinez, president/CEO of Border FCU, Del Rio, Texas, told members of the House Financial Services financial institutions and consumer credit subcommittee on Wednesday.

Martinez appeared at a San Antonio, Texas field hearing on the challenges facing small financial institutions in Texas. She was joined by Robert Glenn, president/CEO of Air Force FCU, of San Antonio, will testify alongside other finance industry representatives.

Martinez in prepared testimony said the MBL cap prevents her credit union from offering business loans to members, as the $100 million in assets credit union would be extremely limited in the number of MBLs it could offer, and would not have the capacity to retain the employees it needs to continue offering MBLs for the long-term.

Legislation that would increase the 12.25% of assets MBL cap to 27.5% is active in both the U.S. House and Senate. Martinez said lifting the cap would be beneficial to both her credit union and communities throughout Texas and across the country, and added legislators "can have confidence that credit unions would lend the estimated $13 billion in the first year because credit unions loaned to their members in the darkest hours of the financial crisis; they have the capacity and experience to stay with them in the recovery, if Congress gives them permission." Business leaders joined the Credit Union National Association (CUNA) to seek Senate MBL support this week, (See related story: Small biz groups, CUNA call for Senate MBL action)

Regulatory burdens and examination issues also create problems for Border FCU, Martinez said, and these sorts of issues were also cited by Glenn in his testimony.

Glenn said his credit union, Air Force FCU, has been harmed by expensive regulations that provide limited benefit to consumers, including debit card interchange fee cap regulations. While some of these rules will not be applicable to credit unions that are similar in size to Air Force FCU, the cost of the regulation will be felt by consumers in some way, he said. Glenn also commented on the CFPB and National Credit Union Administration (NCUA) examinations.

For more on Wednesday's hearing, use the resource links.

Credit union concerns will also be aired in a Las Vegas, Nevada-based subcommittee hearing on potential private sector solutions to foreclosure issues. Sue Longson of El Monte, California-based SCE FCU, will testify at that hearing, which is scheduled to take place today.

Bachus Bonner win Alabama primaries

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WASHINGTON (3/15/12)--House Financial Services Committee Chairman Spencer Bachus (R-Ala.), who was supported in part by credit union sponsored radio advertisements, easily won his U.S. House district Republican primary this week and will now run for reelection to his House seat this November.

Bachus, who has served in the House since 1993, gained 59% of the vote. His nearest challenger, state Sen. Scott Beason, received 27% of the vote. Bachus would have had to face his nearest challenger if he did not win 50% of the primary vote.

Rep. Bachus is heavily favored to win the general election in his conservative district this fall. The Alabama congressman faced a tough Republican primary fight, and the Credit Union National Association's (CUNA) Credit Union Legislative Action Council (CULAC) backed Bachus by running rush-hour radio ads in the days leading up to Tuesday's primary. The ads ran in Alabama's sixth congressional district, which includes Birmingham, Tuscaloosa and a portion of the state capitol, Montgomery. (See March 14 News Now story: CUNA backs Bachus in tough primary fight)

Another Alabama congressman, Rep. Jo Bonner, also won his respective Republican primary yesterday with 56% of the vote, according to the Mobile Press-Register. CULAC and the League of Southeastern Credit Unions also supported Bonner, who will run unopposed in November.

Small biz groups back CUNAs call for MBL action

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WASHINGTON (3/15/12)--A coalition of business groups have joined the Credit Union National Association (CUNA) to urge Senate leaders Harry Reid (D-Nev.) and Mitch McConnell (R-Ky.) to include the Small Business Lending Enhancement Act (S. 509) as part of the jobs legislation the Senate is expected to consider soon.

CUNA and various small business partners in a letter noted that S. 509 would increase the current 12.25% of assets credit union member business lending cap to 27.5% of assets, allowing credit unions to lend $13 billion to small businesses. This extra capital would help create over 140,000 new jobs, at no cost to taxpayers, the letter adds.

It is critically important that small businesses have the access to credit needed to take part in the continuing economic recovery, the letter said, adding that S. 509 and a similar bill, H.R. 1418, enjoy bipartisan support and are "precisely the type[s] of legislation that Congress should enact to encourage greater business lending in communities across the country."

The letter is co-signed by the National Council of Textile Organizations, the American Small Business Chamber of Commerce, the National Farmers Union, the National Association of Realtors, the Realtors Land Institute, the Small Business Majority, the Society of Industrial and Office Realtors, the CCIM Institute, Americans for Tax Reform, the American Consumer Institute, the Hardwood Federation, the Institute of Real Estate Management, NCB Capital Impact MultiFunding, the National Association of Home Builders, the National Association of Professional Insurance Agents, AMT--The Association for Manufacturing Technology, the U.S. Women's Chamber of Commerce, and the Heartland Institute.

This letter was sent days before 4,000-plus credit union advocates from across the country are expected to travel to Washington, D.C. for CUNA's 2012 Governmental Affairs Conference. These credit union representatives will be making trips to every federal lawmakers' office to discuss credit union legislative priorities, including MBLs, increasing access to supplemental capital, and regulatory burdens.

Cheney highlights CU growth in iHuffPosti

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WASHINGTON (3/15/12)--New government figures on credit union membership growth are even more impressive when you dig below the surface, Credit Union National Association (CUNA)  President/ CEO Bill Cheney explains in a column posted on the Huffington Post's website. The membership gains, he said, "are strong evidence that consumers are fed up with high bank fees and leaving in large numbers for credit unions."

Cheney noted the National Credit Union Administration's fourth-quarter data released this month showed 1.3 million people joined credit unions in 2011, more than double the previous year's growth.

CUs saw a net gain of nearly 400,000 in the fourth quarter, a period that encompassed Bank Transfer Day. But the fourth quarter is also a time when many dormant accounts are closed at credit unions.  So much so, he said, that it's not unusual for credit union membership to actually go down in the fourth quarter, as closed accounts exceed those opened by new members.

"We've seen that occur five times in the seven years prior to 2011. The 400,000 net gain in new members in the fourth quarter of 2011 was actually 530,000 greater than the average change in members over the same period during the preceding seven years," Cheney noted.

The CUNA leader added that an additional and perhaps better measure of membership activity at credit unions comes from looking not only at new people who joined, but at new checking accounts opened, since Bank Transfer Day was triggered in large part by big banks' debit card fee increases.

"When you look at the change in new checking accounts, credit unions saw a net increase of about 737,000 in the fourth quarter -- that's nearly three times the average fourth-quarter growth of these accounts in the past seven years," Cheney wrote.  "By establishing checking accounts, these new and existing members alike are apt to make their credit union their primary financial institution."

Cheney's column pointed to recent findings from CUNA's 2012 National Voter Survey as an indication of what is likely driving consumers to credit unions:
  •  Banks received a favorability rating of 69%—the lowest since CUNA began doing the survey 14 years ago;
  •  More than eight in ten consumers said banks today charge too much in fees;
  •  For the first time since CUNA started the survey, as many people (43%) viewed credit unions as the best place to keep their day-to-day checking and savings as they did banks; and
  •  About three out of four (74%) said credit unions "look out for the little guy," compared to 18% who felt that way about banks.
"Taken together," Cheney said," NCUA's data and CUNA's survey results "offer compelling evidence that high banking fees and all the attention surrounding Bank Transfer Day motivated people to move to credit unions."

Inside Washington (03/14/2012)

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  • WASHINGTON (3/15/12)--The Financial Crimes Enforcement Network (FinCEN) has released the new Registration of Money Services Business (RMSB), FinCEN Report 107, through the BSA E-Filing System. The report will replace the most recent FinCEN Form 107. The new report, for all money services businesses (MSBs), facilitates registration by foreign-located MSBs and providers of prepaid access. It is only available electronically. The legacy FinCEN Form 107 does not accommodate electronic filings by foreign-located money service businesses and providers of prepaid access. With the availability of the new report, foreign-located MSBs and providers of prepaid access must file the new RMSB electronically within the compliance deadlines. All other MSBs may continue to file the legacy FinCEN Form 107 as required by FinCEN until March 31, 2013. The issuance of the new RMSB does not change any underlying registration requirements or timing for renewals of a registration …
  • WASHINGTON (3/15/12)--Small Business Person of the Year winners from 50 states, the District of Columbia, Puerto Rico, and Guam will converge on Washington, D.C. in May, when one will be selected as National Small Business Person of the Year during the U.S. Small Business Administration's (SBA) celebration of National Small Business Week, May 20-26. While in D.C., the winners will meet with administration officials, congressional representatives and national business leaders. National Small Business Week is cosponsored by the SCORE Association as well as numerous corporate and trade sponsors to be announced, said SBA. Participants also will be recognized for their involvement in disaster recovery and government contracting, and their support for small businesses and entrepreneurship. Awards will be presented to SBA partners in financial and entrepreneurial development, including the year's top SCORE Chapter, Small Business Development Center and Women's Business Center …
  • WASHINGTON (3/15/12)--The Federal Reserve Board on Wednesday launched its official Twitter channel--@federalreserve--with the aim of increasing the accessibility and availability of Federal Reserve Board news. The Fed's website will remain the board's primary channel of communication. Selected announcements will be tweeted after they are posted on the website. To start, tweets will include items such as press releases, speeches, testimony, reports to Congress, the Monthly Report on Credit and Liquidity Programs and the Balance Sheet, and the Federal Reserve's weekly balance sheet. The Fed also will tweet about educational frequently asked questions and board video links ...