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CUNA survey shows CU political clout

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WASHINGTON (3/8/12)—The growing political clout of credit unions was illustrated in the Credit Union National Association's (CUNA) National Voter Survey, as 55% of respondents said they would favor credit unions if a disagreement over legislation broke out in the U.S. Congress or state legislature between credit unions and banks.

Support for credit unions in a credit union versus bank conflict has grown 12 percentage points since 2004, and has been above 50% since 2010. Meanwhile, public political support for banks has fallen from a high of 48% that was recorded in 2007. A total of 34% said they would favor banks in the 2012 Voter Survey.

The CUNA survey drew responses from 1,000 randomly selected registered voters in locations nationwide. CUNA has conducted an annual voter survey since 1999.

This newest survey showed credit unions also enjoyed support on specific political issues. For instance, 68% approved of the federal credit union tax status, and 58% said they would oppose revoking credit unions' federal tax exemption in a bid to help balance the budget.

The 68% total is a significant increase from the 46% that said they approved of credit unions' tax status in 2009 and has remained steady since 2011. Also, just one in four respondents to this year's survey said they did not support the credit union tax exemption.

In a separate question, 72% of respondents said they agreed that credit unions' tax status is justified by their member-owned structure and their practice of returning earnings to their members through dividends and lower loan interest rates. Only one-quarter of respondents agreed with the banker point of view on this issue.

Survey takers also opined on other hot credit union issues, including the current 12.25% of assets credit union member business lending (MBL) cap.

Legislation that would increase this cap to 27.5% of assets is active in both the House and Senate, and 59% of respondents agreed that credit unions should be allowed to help small businesses and the larger economy by providing more MBLs. Support for an increased MBL cap has remained steady since 2009. Only 29% of this year's respondents said that the cap should remain in place.

"The bottom line is that voters, regardless of party, back credit union issue positions,"  said Richard Gose, CUNA's Senior Vice President of Political Affairs. "This strong voter sentiment in favor of credit unions puts the wind to our back as we go to Capitol Hill on issues like taxation and MBLs."

The survey results have shown that consumer trust in credit unions continues to grow, and that many voters view credit unions favorably. This is the final News Now story on the survey results.

For previous coverage of the survey, use the resource links.

Senate exam improvements bill introduced

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WASHINGTON (3/8/12)--Legislation intended to strengthen the safety and soundness of the financial system by increasing the consistency and fairness of financial institution examinations has been introduced in the Senate.

Bill co-sponsors Sen. Jerry Moran (R-Kan.) and Sen. Joe Manchin (D-W. Va.) in a release said the legislation would establish a "more transparent approach" to financial institution examinations and allow for a "more robust appeals process for times when there is a legitimate disagreement" between a regulator and the regulated.

The bill would establish a new inter-agency ombudsman to investigate complaints about examinations and look at examination quality assurance, require regulators to provide clear and consistent loan treatment guidelines, and prevent regulators from retaliating against institutions that challenge their determinations.

The legislation is similar to the Financial Institutions Examination Fairness and Reform Act (H.R. 3461), which was introduced in the House last November.

The Credit Union National Association (CUNA) supports examination fairness legislation and said of the House bill, "It is a firm step in the right direction toward ensuring the federal financial institution regulatory agencies conduct fair exams, which are consistent with the law and regulation and ensure safety and soundness."

H.R. 3461, which is co-sponsored by House Financial Services subcommittee on financial institutions chair Rep. Shelly Moore Capito (R-W.Va.) and ranking member Rep. Carolyn Maloney (D-N.Y.), has 107 cosponsors.

Minimize CU burdens as rules emerge CUNA to CFPB

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WASHINGTON (3/8/12)--The Credit Union National Association (CUNA) in a comment letter urged the Consumer Financial Protection Bureau (CFPB) to minimize any and all new regulatory requirements for credit unions, and said the agency's regulatory streamlining review should result in "lasting and meaningful regulatory relief" for credit unions "that already serve consumers and small businesses well."

The CFPB last year announced it would accept public comment on how best to streamline the 14 rules that it inherited from the National Credit Union Administration, the Federal Reserve, the Department of Housing and Urban Development, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the Office of Comptroller of the Currency and the Office of Thrift Supervision.

The revisions are meant "to make it easier for banks, credit unions and others to follow the rules" and ensure that regulations work better for consumers and the firms that serve them.

CUNA's Deputy General Counsel Mary Dunn urged the bureau not to contribute to credit union's regulatory burdens and instead, to help minimize them.

"The number one regulatory advocacy priority for CUNA is to minimize the number and complexity of costly regulatory requirements that divert  credit unions' time and economic resources from member service," Dunn wrote. CUNA also urged the agency to consider how it can exempt credit unions from future regulatory requirements.

"Credit unions simply do not need, and will have increasing difficulties assimilating, additional regulatory burdens if they are to fulfill their purpose of responding to their members' financial needs," the letter added.

Dunn said that CUNA does not think that credit unions are a direct target of CFPB regulatory efforts. But, "there is also a concern that credit unions may suffer collateral damage as a result of the agency's efforts to direct rules toward others," she added.

The CUNA comment letter cited the recent remittance final rule and concerns about the CFPB's announced intention to investigate overdraft protection programs. "We urge the agency to approach the review of overdraft protection with reasonableness and allow financial institutions to structure overdraft programs and other check payment accommodations with flexibility, consistent with legal requirements and fairness," Dunn wrote.

In terms of regulatory relief areas, she urged the agency to focus first on the mortgage lending process to improve it for consumers and lenders alike. If the agency decides to review rules on an individual basis, the Truth-in-Lending and Real Estate Settlement Procedure Acts "should be at the top of the list for review and improvements," CUNA said.

The CFPB plans to consider simplifying some regulations, standardizing some common terms across regulations, updating outdated or unneeded regulations, and removing unnecessary restrictions on consumer choice or business innovation.

CUNA said the bureau should conduct similar regulatory streamlining reviews on an annual basis, publishing a list of rules it plans to review before the start of each year. CUNA suggested the list of rules be open for public comment for 120 days.

The regulatory transfers were mandated by the Dodd Frank Act. CUNA has commented on almost all rules that have been transferred to the bureau that have been published for comment and that affect credit unions.

For the full CUNA comment letter, use the resource link.

NCUA video offers free advice to small CUs

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ALEXANDRIA, Va. (3/8/12)--The National Credit Union Administration (NCUA) has highlighted the Office of Small Credit Union Initiatives' (OSCUI) Direct Assistance program in its latest YouTube training video.

NCUA board member Michael Fryzel in the video explains the purpose of the OSCUI, and how the office helps the NCUA achieve its mission and goals.

The video, which is the second in a series, also details how the agency's Economic Development Specialists (EDS) help small credit unions overcome challenges by providing them with free expert consulting services. Credit union officials also share their experiences with EDS consultants in the video.

Ohio primary results of note for CUs

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WASHINGTON (3/8/12)--Looking past the Super Tuesday presidential primaries, credit unions will find there were other interesting results in the Ohio congressional primaries.

Of note to credit unions:

  • Rep. Jean Schmidt (R) lost her primary race to Brad Wenstrup, an Iraq War veteran and surgeon. Credit Union National Association (CUNA) Vice President of Political Affairs Trey Hawkins said Wednesday Schmidt had been largely neutral with regard to credit union issues, neither hostile nor strongly supportive, and CUNA and the Ohio league were not involved in the primary.  However, Hawkins added, CUNA and the league will be working to build a positive relationship with the ultimate victor in Ohio's second district.
  • In Ohio's third district, former Rep. Mary Jo Kilroy (D) very narrowly lost the Democratic primary in a new heavily Democratic Columbus seat to state legislator Joyce Beatty. CUNA was not involved in the primary, but successfully supported Kilroy's opponent, now-Rep. Steve Stivers (R), in 2010. Kilroy, a former member of the House Financial Services Committee, was on the conference committee for the Dodd-Frank Wall Street Reform and Consumer Protection Act, and was a vocal proponent of the Durbin Amendment that imposed limits on debit card interchange fees.
  • In an unusual primary that pitted one incumbent House member against another and, coincidentally, one credit union ally against another because of congressional redistricting, Rep. Marcy Kaptur of Ohio's ninth district won in a 60%-36% landslide against Rep. Dennis Kucinich, formerly of the tenth district.
Kaptur has co-sponsored the CUNA-backed member business lending (MBL) bill both is this session of Congress and the last.

She supported credit unions in the contentious Dodd-Frank interchange debate--and signed the "dear colleague" letter on this issue circulated by Rep. Debbie Wasserman Schultz (D-Fla.) in 2010.

Kaptur also signed on as co-sponsor of the Credit Union Regulatory Improvements Act (CURIA) each of the three times it was introduced in Congress.  CUNA and the league supported Kaptur in the primary.

Hawkins said that, ultimately, Kaptur has been a good friend to credit unions and she understands credit unions' challenges.  "CUNA looks forward to the opportunity to continue working with her."

Inside Washington (03/07/2012)

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  • WASHINGTON (3/8/12)--Within the next year the Consumer Financial Protection Bureau (CFPB) will issue new mortgage-servicing rules concerning better information disclosure for consumers, force-placed insurance and hybrid, adjustable-rate mortgages, CFPB Director Richard Cordray said Tuesday. The CFPB will issue rules to prevent servicers from charging for force-placed insurance unless there is a reasonable basis to believe that borrowers have failed to maintain their own insurance, Cordray said in a speech at the National Association of Attorneys General annual meeting. Consumers will be notified months ahead of their first interest-rate adjustment, and they will receive a disclosure of their new monthly payment, along with any available options to head off the higher rate, such as refinancing and renegotiation of loan terms, he said. "By comprehensively assessing large collectors, as well as many of the bank creditors who originate the debt, supervision would allow us to understand and address the systemic problems posing risks to consumers," Cordray said. "By proactive coordination among federal and state law enforcement, we can help Americans dig themselves out of the residue of this financial crisis, without being plagued by the indignity of illegal debt collection tactics" …