Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

Washington Archive

Washington

FinCEN releases 2012-2016 strategic plan

 Permanent link
WASHINGTON (3/16/12)--Promoting stronger anti-money laundering (AML) and counter-terrorist financing (CFT) policies and programs worldwide are among the many goals that the Financial Crimes Enforcement Network (FinCEN) set in its 2012-2016 strategic plan.

FinCEN said it would work with its global partners to develop new AML/CFT policy and best practices, enhance bilateral and multilateral engagement with foreign regulators on AML/CFT regulation and compliance, and promote stronger global AML/CFT regimes.

FinCEN Director James Freis added the agency will work closely with law enforcement, federal and state regulators, and foreign counterparts to keep financial systems transparent and crime resistant. The agency also noted the importance of analyzing and sharing information to help detect and deter financial crime, and ensuring that data the agency collects remains useful in its strategic plan for the 2012-2016 fiscal years.

Another emphasis will be promoting "constructive dialogue" on how financial institutions can better focus their efforts on serving customers, not criminals, Freis added.

For the full FinCEN release, use the resource link.

CUs INatl JournalI to help kids hospitals at RNC DNC

 Permanent link
WASHINGTON (3/16/12)--The Credit Union National Association (CUNA) and National Journal Group will team up to honor the Republican and Democratic National Conventions by restoring, refreshing and revitalizing therapeutic playgrounds at All Children's Hospital and Levine Children's Hospital in St. Petersburg, Fla., and Charlotte, N.C., respectively.

CUNA, credit unions and the National Journal will work to make much-needed improvements to outdoor play areas at each of these hospitals in the months before this summer's national political conventions. The effort represents credit unions' tradition of honoring each national political convention city with a "leave-behind" project that will serve the local communities long after the conventions have left town.

At Levine Children's Hospital in Charlotte, the project will convert existing outdoor rooftop space on the hospital's 12th floor into a dynamic play space that will include a touch-activated light and color "bubble wall," outdoor play equipment, and much needed environmental improvements.  At All Children's Hospital in St. Petersburg, an existing playground will be retrofitted with special equipment designed to assist in the rehabilitation of children suffering from a variety of illnesses and accidents.

CUNA President/CEO Bill Cheney said credit unions "are at their core about people helping people," and noted there could be no better way to help the communities in these two convention cities "than to give the children and their families at these hospitals a place to play and heal."

National Journal Group president Andy Sareyan said his organization is proud to take part in these projects.

The two projects will cost an estimated $600,000, and the cost of the renovations will be paid for with funds raised by credit unions nationwide. The Carolinas Credit Union Foundation, representing credit unions belonging to the North Carolina Credit Union League and the South Carolina Credit Union League, and the Southeastern Credit Union Foundation, and affiliate of the League of Southeastern Credit Unions, are spearheading the fundraising efforts for Levine Children's and All Children's respectively.  CUNA Mutual Group, an insurance and financial services provider for credit union members, is also providing support for the undertaking.

CUNA will officially kick off the projects and begin fundraising efforts at next week's Governmental Affairs Conference in Washington, D.C.

Diversity plan approved at NCUA meeting

 Permanent link
ALEXANDRIA, Va. (3/16/12)--The agency's diversity and inclusion strategic plan and technical changes were both approved at Thursday's brief National Credit Union Administration (NCUA) open board meeting.

The NCUA Diversity and Inclusion Strategic Plan, which was unanimously approved by the board, "will add more momentum toward building and sustaining a diverse NCUA work force" and brings the agency's efforts "to advance equal opportunity, diversity, and inclusion within NCUA" into sharper focus, NCUA Chairman Debbie Matz said.

The plan focuses on the agency's requirements for its own work force and use of vendors, but the NCUA and other regulators will also soon begin reviewing diversity policies and practices of the institutions they regulate. The agency has discussed how to approach these reviews with the Credit Union National Association, the National Association of State Credit Union Supervisors, credit unions and state credit union leagues, and others. CUNA and the leagues have stressed that NCUA must do all it can to minimize any new reporting or compliance requirements under this authority as well as the agency's undue interference in credit union operations.

The NCUA-approved technical changes came in the form of a final rule that immediately affects Parts 701, 760, and 790 of NCUA regulations, which address non-discrimination requirements, flood insurance and the agency's structure.

The final rule shifted responsibility for discrimination complaints that are received under the Fair Housing and Equal Credit Opportunity Acts to the NCUA's Office of Consumer Protection. Those complaints previously were sent to the NCUA's Office of Examination and Insurance. The NCUA also approved non-substantive changes to standard flood hazard determination forms, replacing the Federal Emergency Management Administration address listed on the form with that agency's website, fema.gov.

The agency also released its first quarterly financial report of 2012. (See related News Now story: NCUA report shows CU system improvement)

For more on the NCUA meeting, use the resource link.

NCUA report shows CU system improvement

 Permanent link
ALEXANDRIA, Va. (3/16/12)--The latest report on the financial status of the credit union system, which was released at Thursday's National Credit Union Administration (NCUA) open board meeting, reflects the positive trends the credit union system is experiencing, with the agency reporting a National Credit Union Share Insurance Fund (NCUSIF) equity ratio of 1.30% as of Dec. 31.

NCUA Chief Financial Officer Mary Ann Woodson reported that as of year-end 2011, there were 409 low-rated CAMEL 4 and 5 credit unions, representing 3.31% of total insured shares and accounting for approximately $26.3 billion of total credit union system member shares. There were 1,741 CAMEL 3 credit unions, representing 15.9% of insured shares, or $126.5 billion, the NCUA added. In total, the amount of insured shares held in CAMEL Code 3, 4, and 5 credit unions decreased by 4.2 percentage points from 2010's end-of-year total of 23.5%.

There were 16 credit union failures in 2011, down from 28 in 2010, the NCUA report added.

NCUA Chairman Debbie Matz highlighted a decrease in the NCUSIF's reserves, which fell to $606.6 million, well down from the $1.2 billion total set aside at the beginning of 2011. The reduction was almost entirely due to a decrease in future expected failure costs rather than from actual losses due to resolutions of failed credit unions, and Matz said the agency would use the year-end reallocation from the NCUSIF to lower corporate stabilization fund assessments.

For more on the NCUA board meeting, use the resource link.

Senate majority leader Reid pledges vote on MBL

 Permanent link
WASHINGTON (3/16/12)--U.S. Senate majority leader Harry Reid (D-Nev.) and Sen. Mark Udall (D-Colo.) both spoke in the Senate floor Thursday in favor of legislation to increase the credit union member business lending (MBL) cap.

Reid indicated that he has been working with Udall to attach the MBL bill to a pending small business bill, the Jumpstart Our Business Startups (JOBS) Act. (See News Now March 15.) Under the process to which the Senate has agreed for consideration of the jobs bill, the Udall amendment can only be added by unanimous consent and indications are that effort would not likely be successful.

However, leader Reid indicated to the Senate body that he has begun procedural steps to bring the Udall bill (S. 509) to the floor as a stand-alone bill.  No timetable was given, but Reid pledged there would be a vote on the bill, which would increase the MBL cap to 27.5% of a credit union's assets, up from 12.25%.

Udall, Wednesday night and again Thursday morning to his Senate colleagues on behalf of the MBL bill, blamed what he said could only be called a "strange" government MBL cap with keeping needed credit away from the country's small businesses.

He said that credit unions stand ready and able to provide additional credit to their small business members, but that hundreds of the financial cooperatives are currently impeded by the low statutory cap.

The Senate floor discussion occurred just days before more than 4,000 credit union representatives are scheduled to hit Washington, D.C. to attend the Credit Union National Association's (CUNA's) Governmental Affairs Conference. A standard feature of the GAC is that the representatives meet with their delegations of federal lawmakers to discuss key issues, such as the pending House and Senate bills that would increase the MBL cap.  This year, credit unions will visit each of the 535 House and Senate offices to drive home the MBL message and discuss other key topics.

CUNA President/CEO Bill Cheney said after the senators' floor statements, "I cannot stress enough how critical next week's meetings will be to credit unions' success on this issue." He encouraged credit unions, in advance of those meetings, to continue to reach out to all senators to encourage them to support the Udall bill.

CUNA coalition seek dismissal of merchant interchange suit

 Permanent link
WASHINGTON (3/16/12)--The Credit Union National Association (CUNA) Thursday joined a broad coalition of trade associations representing thousands of small and large financial institutions to file an amicus brief in a lawsuit brought by merchants against the Federal Reserve Board's rule that sets a debit interchange fee cap.

The joint brief describes how small and large financial institutions are harmed by the Fed's tight fee ceiling. It underscores that consumers have not seen any pricing benefits for products and services promised by the merchants when they were fighting for a government-set cap on what card issuers may charge for their services.

While the merchants' suit charges that the Fed cap is too high, the amicus brief counters that it is, instead, too low and does not allow debit card issuers to cover their costs and a reasonable rate of return on their investments. An amicus brief can be filed in a court case by interested parties not named in a lawsuit. The court can accept or reject the brief as part of the case record.

The Fed was charged with setting the debit fee limit under provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Fed's final rule, which became effective in October, caps debit interchange fees for issuers with assets of $10 billion or more at 21 cents.

The regulation also allows card issuers to charge an additional five basis points of the value of the transaction to cover fraud losses. An extra penny may also be charged by financial institutions that are in compliance with the Fed's fraud-prevention standards.

The Fed rule is not meant to apply to issuers with less than $10 billion in assets, which means nearly all credit unions are exempt. However, the brief notes that there is serious doubt whether this exemption will work in practice, because merchants will have an incentive to steer transactions toward lower-fee debit cards from the bigger issuers.

The CUNA joint brief asks the U.S. District Court for the District of Columbia to reject the merchants' suit.

"They're correct that the final rule is flawed--but not for any of the reasons they claim," the brief says. It goes on to argue the rule sets "draconian price caps" that don't allow card issuers to pursue their "statutory and constitutional right to a reasonable rate of return on their investments."

On the other hand, CUNA and its partners argue, industry data cited on the Electronic Payments Coalition website indicate that retailers have saved $825 million since the interchange cap came into effect, and Bloomberg Government has estimated that retailers will bring in an additional $8 billion in revenues per year as a result of the interchange changes.

"Not content with the annual $6 billion-$8 billion in extra profits they have secured, giant retailers are now suing to increase their windfall," the brief charges.

The coalition filing the amicus brief also includes the Independent Community Bankers of America,  National Association of Federal Credit Unions,  Midsize Bank Coalition of America, Consumer Bankers Association, National Bankers Association, The Clearing House Association, American Bankers Association, The Clearing House Payments Company,  and The Financial Services Roundtable.

Inside Washington (03/15/2012)

 Permanent link
  • WASHINGTON (3/16/12)--Revised Americans with Disabilities Act (ADA) rules issued last July by the Department of Justice went into effect Thursday. The area receiving the most attention from credit unions is Section 707, which requires, among other things, that ATMs be speech-enabled for use by the visually impaired. This means operating instructions, visible transaction prompts, user-input verification, error messages, and any other displayed information for full use of the machine must be accessible to, and independently usable by, individuals with vision impairments. Speech must be recorded or digitized human, or synthesized, and delivered through a mechanism that is readily available to all ATM users, such as through a telephone handset or a headset plugged into an audio jack. Section 220 of the accessibility guidelines states that where ATMs are provided, at least one accessible machine must be provided at each location to comply with the ATM standards in Section 707. In general, if a credit union provides both interior and exterior ATMs, they will be considered separate locations …
  • WASHINGTON (3/16/12)--It's official: the National Federation of Community Development Credit Unions confirmed that its departing leader of 32 years, Clifford N. Rosenthal, will move to the Consumer Financial Protection Bureau on May 7 to become the bureau's assistant director of its Office of Financial Empowerment. The federation announced Thursday that its leadership--both Rosenthal and board chairman Lynda Milton--will conduct a press conference during the Credit Union National Association's Governmental Affairs Conference next week to discuss the organization's plans for transition. The press conference is set for Tuesday at 7:30 a.m. (ET) …

NEW Senate leader Reid promises MBL vote

 Permanent link
WASHINGTON (UPDATED 3/15/12 1:00 p.m. ET)--Within minutes of one another this morning on the floor of the U.S. Senate, Majority Leader Harry Reid (D-Nev.) and Sen. Mark Udall (D-Colo.) spoke in favor of legislation to increase the credit union member business lending (MBL) cap.

Reid indicated that he has been working with Udall to attach the MBL bill to a pending small business bill, the Jumpstart Our Business Startups (JOBS) Act. (See News Now March 15) Under the process to which the Senate has agreed for consideration of the jobs bill, the Udall amendment can only be added by unanimous consent and indications are that effort would not likely be successful.

However, leader Reid indicated to the Senate body that he has begun procedural steps to bring the Udall bill (S. 509) to the floor as a stand-alone bill.  No timetable was given, but Reid pledged there would be a vote on the bill, which would increase the MBL cap to 27.5% of a credit union's assets, up from 12.25%.

Udall, speaking last night and again this morning to his Senate colleagues on behalf of the MBL bill, blamed what he said could only be called a "strange" government MBL cap with keeping needed credit away from the country's small businesses.

He said that credit unions stand ready and able to provide additional credit to their small business members, but that hundreds of the financial cooperatives are currently impeded by the low statutory cap.

The Senate floor discussion occurred just days before more than 4,000 credit union representatives are scheduled to hit Washington, D.C. to attend the Credit Union National Association's (CUNA's) Governmental Affairs Conference. A standard feature of the GAC is that the representatives meet with their delegations of federal lawmakers to discuss key issues, such as the pending House and Senate bills that would increase the MBL cap.  This year, credit unions will visit each of the 535 House and Senate offices to drive home the MBL message and discuss other key topics.

CUNA President/CEO Bill Cheney said after the senators' floor statements, "I cannot stress enough how critical next week's meetings will be to credit unions' success on this issue." He encouraged credit unions, in advance of those meetings, to continue to reach out to all senators to encourage them to support the Udall bill.

NEW CUNA coalition seek rejection of merchants interchange suit

 Permanent link
WASHINGTON (UPDATED 3/15/12, 11:00 p.m. ET)--The Credit Union National Association (CUNA) today joined a broad coalition of trade associations representing thousands of small and large financial institutions to file an amicus brief in a lawsuit brought by merchants against the Federal Reserve Board's rule that sets a debit interchange fee cap.

The joint brief describes how small and large financial institutions are harmed by the Fed's tight fee ceiling. It underscores that consumers have not seen any pricing benefits for products and services promised by the merchants when they were fighting for a government-set cap on what card issuers may charge for their services.

While the merchants' suit charges that the Fed cap is too high, the amicus brief counters that it is, instead,  too low and does not allow debit card issuers to cover their costs and a reasonable rate of return on their investments. An amicus brief can be filed in a court case by interested parties not named in a lawsuit. The court can accept or reject the brief as part of the case record.

The Fed was charged with setting the debit fee limit under provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The Fed's final rule, which became effective in October, caps debit interchange fees for issuers with assets of $10 billion or more at 21 cents.

The regulation also allows card issuers to charge an additional five basis points of the value of the transaction to cover fraud losses. An extra penny may also be charged by financial institutions that are in compliance with the Fed's fraud-prevention standards.

The Fed rule is not meant to apply to issuers with less than $10 billion in assets, which means nearly all credit unions are exempt. However, the brief notes that there is serious doubt whether this exemption will work in practice, because merchants will have an incentive to steer transactions toward lower-fee debit cards from the bigger issuers.

The CUNA joint brief asks the U.S. District Court for the District of Columbia to reject the merchants' suit.

"They're correct that the final rule is flawed--but not for any of the reasons they claim," the brief says and goes on to argue the rule sets "draconian price caps" that don't allow  card issuers to pursue their "statutory and constitutional right to a reasonable rate of return on their investments."

On the other hand, CUNA and its partners argue, industry data cited on the Electronic Payments Coalition website indicates that retailers have saved $825 million since the interchange cap came into effect, and Bloomberg Government has estimated that retailers will bring in an additional $8 billion in revenues per year as a result of the interchange changes.

"Not content with the annual $6-$8 billion in extra profits they have secured, giant retailers are now suing to increase their windfall," the brief charges.

The coalition filing the amicus brief also includes the Independent Community Bankers of America,  National Association of Federal Credit Unions,  Midsize Bank Coalition of America, Consumer Bankers Association, National Bankers Association, The Clearing House Association, American Bankers Association, The Clearing House Payments Company,  and The Financial Services Roundtable.