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Fed FTC plan could ease credit score access

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WASHINGTON (3/4/11)--The Federal Reserve this week joined the Federal Trade Commission (FTC) to propose changes that would likely ease access to credit scores for consumers. In a joint release, the Fed and FTC said that their proposal would impact when credit providers are required to provide cardholders with their credit scores. The proposal would require creditors to disclose credit scores and related information to consumers in risk-based pricing and adverse action notices under the Fair Credit Reporting Act (FCRA) if a credit score was used in setting the credit terms or taking adverse action. The changes would also revise content requirements for risk-based pricing notices and add related model forms to reflect the new credit score disclosure requirements, according to the Fed/FTC release. The changes were proposed by the Dodd-Frank Act, which passed last year. The proposed rules will address both federal- and state-chartered credit unions, and the National Credit Union Administration will not be required to independently address these matters. However, the NCUA could release its own proposal if it feels the need to further clarify on the Fed/FTC action. Comments on the proposal will be accepted for 30 days after it is published in the Federal Register. For the full Fed/FTC joint release, use the resource link.

CUs blanket Hill with message on key issues

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WASHINGTON (3/4/11)—A week of credit union advocacy continued on Wednesday as thousands of credit union representatives from across the country flooded the halls of Congress as part of the Credit Union National Association’s (CUNA) 2011 Governmental Affairs Conference.
Click for slide showRep. Ed Perlmutter (D-Colo.), right, goes into great depth during a discussion on member business lending, interchange fees, and other issues facing credit unions. Perlmutter met with representatives of the Colorado Credit Union League and various state credit unions during their Wednesday Capitol Hill hike. (CUNA Photo)
CUNA primed the credit union reps ahead of their Capitol Hill hikes, identifying credit unions’ tax exempt status, interchange fee regulations, member business lending (MBL), supplemental capital, and the overall credit union difference as key concepts to be communicated to Congress. Representatives from New York state credit unions and the Credit Union Association of New York (CUANY) during their visits asked Rep. Peter King (R) to consider their position on the major issues confronting credit unions today: interchange, supplemental capital, member business lending and maintaining credit union non-tax status. CUANY President/CEO William Mellin during that meeting described the interchange proposal as “well intended legislation that’s going to hurt American consumers.” Supplemental capital and extended MBL authority would allow credit unions to offer more services to their members at a time when credit and job creation are critical to growing the U.S. economy, Mellin said, adding that the MBL legislation is “similar to an economic stimulus package that has zero cost to the American taxpayer.” CUNA has estimated that increasing the MBL cap to 27.5% of assets would inject $10 billion into the U.S. economy and create 100,000 jobs. The New York group also thanked co-sponsor Charles Schumer (D) for his work on behalf on credit unions during a late Wednesday meeting. A Colorado contingent also stressed the credit union position on interchange, supplemental capital, MBL, and tax exemption during their meetings with legislators. Rep. Ed Perlmutter (D) listened to the group’s concerns on supplemental capital, MBL and the credit union tax exemption, and said that his top near-term credit union legislative priority was interchange. “If we can get a delay for some time to study this issue and take into account the needs of consumers, the safety and soundness of financial institutions and the margins of the merchants, I think we can find a solution,” Perlmutter said. Michigan Credit Union League President/CEO Dave Adams said that his group’s Wednesday visits were extremely productive, and particularly noted his visits with Reps. Gary Peters (D) and Dave Camp (R). Camp remains “a good friend of credit unions,” and Peters during their meeting reaffirmed that the debit interchange issue will have “unintended consequences” and needs to be fixed. Peters “understands the on-the-street effect” of interchange, “and he is helping us with it,” Adams added. Michigan legislators have consistently backed credit union causes in Washington, Adams noted. Credit union groups from Alaska, North Carolina, Hawaii, California and Nevada, Virginia, Wisconsin and Maine were among the many groups that offered access to their representatives through legislative receptions. The New Jersey Credit Union League added that the GAC-related hikes demonstrate to members of Congress just how committed credit unions are to playing an active role in the public policy process.

NCUA reports CU key ratios improved in 2010

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ALEXANDRIA, Va. (3/4/11)--Nationwide credit union membership inched up during 2010, totaling 90.5 million by the end of the year, and credit union investment, earnings and assets also grew last year, the National Credit Union Administration (NCUA) reported on Thursday. “While credit unions are still not back to their pre-recession performance, they are showing decent signs of recovery," Credit Union National Association Chief Economist Bill Hampel said. "CUNA expects 2011 to be even better than 2010, with continued declines in loan losses and some modest improvement in earnings,” Hampel added. The NCUA’s December 2010 Call Report data note that loan delinquencies and charge-offs both declined during the year. Although total loans outstanding fell by 1.3% in 2010, used-vehicle loans increased by 3.4%, first mortgage real estate loans increased by 2.7%, and unsecured credit card lending rose by 3.1%. The agency also noted a 16.4% decrease in new-car loans during 2010. According to the NCUA report:
* Assets increased 3.4%, totaling $914.5 billion; * Loans declined 1.3%, totaling $564.8 billion; * Shares increased 4.5% to $786.5 billion; * Investments increased 13.4% to $238.9 billion; and * Net income increased 208.3%.
Net income for 2010 totaled $4.6 billion, up from 2009’s total of $1.5 billion NCUA Chairman Debbie Matz said that “credit unions, as a whole, are exhibiting positive trends in their operations,” adding that the recovering economy helped net worth climb to 10.1% and increased credit unions’ return on average assets (ROA) by 33 basis points. Credit union ROA totaled 0.51% in 2010, up from the 2009 total of 0.18%. “To the maximum extent possible, NCUA will continue to ensure that this progress persists and credit unions remain well-positioned to serve American consumers,” Matz added. For the full NCUA report, use the resource link.

Inside Washington (03/03/2011)

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* ALEXANDRIA, VA. (3/4/11)--The National Credit Union Association’s (NCUA) next free Credit Union Roundtable session is coming up April 14 in Birmingham, Ala., at the Doubletree Hotel. Stipends are available up to $350 from the NCUA for credit unions with assets of $10 million or less. The workshop, however, is open to all credit unions regardless of asset size. Roundtable topics are to include: issues facing credit unions; financial literacy, education, and savings; what the NCUA’s Consumer Protection Office means to credit unions; and more. Registration is open now … * WASHINGTON (3/4/11)--The House Financial Services Committee, expected to vote Thursday on a bill that would kill the Obama administration’s often-criticized Home Affordable Modification Program (HAMP), has pushed that vote back to a later time. (Reuters March 3) The committee intended to keep its Thursday vote schedule for two smaller housing programs, but Chairman Spencer Bachus (R-Ala.) announced the HAMP vote would be delayed until next week …