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Inside Washington (03/31/2008)

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* WASHINGTON (4/1/08)--The Federal Reserve Banks Monday announced changes to the schedule for previously announced check processing infrastructure changes as consumers and businesses continue the shift from paper checks to electronic payments. The revised schedule takes effect immediately. Seven sites will change this year, compared with the five sites originally scheduled. The announcement marks the banks’ sixth annual review of their check infrastructure ... * WASHINGTON (4/1/08)--Secretary of the Department of Housing and Urban Development Alphonso Jackson announced that he will step down from his position. His resignation is effective April 18. Jackson said he resigned to spend more time with his family. His resignation coincides with the Bush administration’s pressure on the department to help solve the foreclosure crisis (The New York Times March 31) ...

FTC-TJX settlement constructive says CUNA

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WASHINGTON (4/1/08)—A Federal Trade Commission (FTC) decision to require TJX Cos. to beef up security and submit audits--every other year for the next 20 years--by independent third-party security professionals appears to be a constructive settlement, according to the Credit Union National Association (CUNA). The FTC last week announced its resolution with the company whose hacked information was the source in 2007 of in the largest reported breach of credit and debit card information in history. TJX is parent company to such discount retail stores as TJ Maxx, Marshalls and Homegoods. CUNA General Counsel Eric Richard said Monday the FTC agreement with TJX appears to be comprehensive and should “send a message to merchants that they must take appropriate security measures to protect customer data.” “If all merchants were to take similar measures, credit unions would, I think, be exposed to less risk and have to consider reissuing large numbers of cards much less frequently," Richard said. The FTC announcement noted that TJX, as well as data brokers Reed Elsevier and Seisint, have agreed to settle charges that each engaged in practices that, taken together, failed to provide reasonable and appropriate security for sensitive consumer information. The settlements will require that the companies implement comprehensive information security programs and obtain the audits. The breach event, coupled with a significant increase in sophisticated attempts to phish personal information from consumers, were integral to changes in the way credit unions and their members deal with security issues. More credit unions are taking precautions by offering credit monitoring identity theft services and security solutions.

Mica Treasurys perilous plan has long road

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WASHINGTON (4/1/08)--After reviewing details of the U.S. Treasury’s long-term plan to overhaul the nation’s financial institution regulatory structure, Credit Union National Association (CUNA) President/CEO Dan Mica remained convinced the plan is perilous for credit unions and consumers.
During yesterday's briefing on the Treasury's regulatory proposal, U.S. Treasury Secretary Henry Paulson listens to CUNA President/CEO Dan Mica, who asserted the proposal could put credit unions out of business. Paulson rejected that notion and said such an outcome was not Treasury's intent. (Photo source:
Mica attended Treasury Secretary Henry Paulson’s briefing Monday on the agency’s regulatory restructuring blueprint. Paulson explained details in the 212-page report and the thinking behind its development. A summary of the report was leaked to the media during the weekend. During Monday’s briefing in Washington, Mica explained to Paulson that the Treasury proposal would result in the demise of credit unions as they function today. Paulson rejected that assertion and said “If you read the executive summary, you'll see it is not our intent and that would not be the effect.” Mica said the report’s language indicates otherwise:
* All institutions desiring federal deposit insurance--whether banks, thrifts, or credit unions; including state-chartered institutions--would be required to obtain the new "federal insured depository institution" (FIDI) charter (report p. 160); * The recommendation would combine the five federal regulatory bodies into three--the National Credit Union Administration would cease to exist; * Cooperative institutions could operate under the FIDI charter. However, to qualify for the tax-exemption, these institutions would be required to elect “community status” and meet a series of apparently stringent tests in terms of asset size, field of membership, and service to the underserved. It appears small banks also could meet such tests and claim the tax-exemption (report p. 161); * A Presidential Executive Order may be issued to all federal regulators expanding an existing interagency working group and directing them to more closely coordinate during the current financial crisis. After the expansion, NCUA will still not be included; * Finally, there is insufficient information about the new federal regulatory body that would oversee all payment systems.
Mica emphasized that the provisions of greatest concern to credit unions are long-term recommendations, which Paulson dubbed an “aspirational plan” that “requires thoughtful discussion”--as well as congressional action. Lawmakers on Capitol Hill would not address them anytime in the foreseeable future and certainly not in this Congress, according to Mica. Despite the lengthy timetable, the CUNA leader remained especially bothered by one aspect of the report. “What may be most disturbing about the Treasury plan is its assumption that financial institutions can be compared solely on the basis of the services they offer, without regard to structural and cultural differences between different types of institutions,” said Mica. “As a result, Treasury does not acknowledge any unique contribution from credit unions based on their not-for-profit, cooperative structure.” Use the resource link below to review Treasury’s complete 212-page blueprint.

Hill covered with CUNAs Treasury blueprint letters

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WASHINGTON (4/1/08)—As part of comprehensive actions to alert federal policy- and lawmakers of concerns about the U.S. Treasury’s blueprint for regulatory restructuring, Credit Union National Association (CUNA) President Dan Mica Monday sent a letter to every member of Congress. Mica expressed credit unions’ grave concerns regarding the Treasury plan that ultimately would phase out the National Credit Union Administration (NCUA) and place banks and credit unions under one regulator's oversight, as well as merge various charters into a single charter type. "The strategy regarding credit unions reveals Treasury's apparent total disregard for the uniquely democratic and consumer-owned structure of credit unions and the pocket book benefits from better rates and services their consumer/members are provided," Mica said in the letter sent to each House and Senate member. He underscored the fact that credit unions have not contributed to the current housing and credit problems the nation is experiencing. Yet the Treasury proposal, he said, "would eliminate one of the few sectors of the financial services industry that has consistently acted in the best interest of consumers." Mica urged the country’s lawmakers to “make a strong statement regarding the important role that credit unions play in helping America's consumers through these difficult economic times by quickly enacting H.R. 1537." He was referring to the Credit Union Regulatory Improvements Act, know as CURIA. CURIA would provide for a risk-based capital system, raise the ceiling on credit union loans to members for business purposes, and clarify that all federally insured credit unions are eligible to add underserved areas to their field of membership. The Treasury’s strategy regarding credit unions, Mica said, serves to reveal the department’s “apparent total disregard for the uniquely democratic and consumer-owned structure of credit unions and the pocket book benefits from better rates and services their consumer/members are provided." In a related story, NCUA Chairman JoAnn Johnson said in a statement that the Treasury’s plan “raises important issues about the optimal structure for governmental oversight of U.S. financial markets. She said that while the NCUA agrees with safety and soundness objectives, “we have significant concerns that the many consumer benefits of the credit union system would be threatened by any restructuring proposal that may blur the credit union charter and that eliminates the separate regulatory and insurance function for federally insured credit unions." The NCUA will conduct a detailed review of the Treasury report, Johnson said.

Go Direct offers new fin ed tools

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WASHINGTON (4/1/08)—Opportunities to offer consumers’ a bit of financial education are blossoming all over this Spring, with April named Financial Literacy Month and May designated Older American Month. The U.S. Treasury Department’s “Go Direct” program to encourage direct deposit of government benefits checks is offering downloadable tools to inform seniors about the benefits of having checks deposited automatically into their accounts. Those tools include:
* A Financial Literacy Month overview providing ways to incorporate Go Direct into existing financial literacy efforts; * PowerPoint slides with key information about the benefits of direct deposit, which can be incorporated into existing presentations; * A “Direct Deposit Myths and Facts” sheet for hand-out at presentations, workshops or meetings, a flyer that is intended to identify and dispel common misconceptions about direct deposit.
Additional downloadable items specifically designed for use during Financial Literacy Month are: for you to download and include in your financial literacy efforts. Below are additional items specifically for April Financial Literacy Month for you to download and include in your financial literacy efforts. Newsletter copy, poster, web banner – "take charge of your finances,” web banner – "sign up for direct deposit," event flier, telephone hold message script, statement stuffer and statement message. The Credit Union National Association (CUNA) is a Go Direct national partner and supports the check-safety and cost-savings goals for the program. Paper checks make up only 20% of the total number of Social Security payments, but they account for more than 90% of reported problems. In fiscal year 2007, for example, nearly 60,000 Treasury-issued checks were forged -- totaling an estimated $56 million. Direct deposit eliminates the risk of check fraud and helps protect people from identity theft. Use the resource link below to access the Treasury materials.

Power breakfast keeps CUs in Hill view

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WASHINGTON (4/1/08)—With three broadly known U.S. senators on the risers, the Credit Union National Association (CUNA) will continue to keep credit unions in the focus of Capitol Hill Wednesday with its seventh “Power Breakfast” Organized by National Journal and MSNBC, co-sponsored by CUNA and various other enterprises, the power breakfast series has typically attracted close to 100 Capitol Hill staffers, lobbyists and reporters. On April 2, the offering will feature a discussion on the upcoming presidential election, called “Super-Surrogates: The candidates biggest supporters state their case.” The phrase “super surrogate” is meant to capture the speakers’ positions as not only superdelegates, but also as official representatives of one of the campaigns. Scheduled participants in the discussion are:
* Sen. Evan Bayh (D-Ind.), who has backed Sen. Hillary Clinton (D-N.Y.) in her bid for the presidency; * Sen. Richard Durbin (D-Ill.), a supporter for the Democratic contender from his state, Sen. Barak Obama; and * Sen. Lindsey Graham (R-S.C.), who has cast his support behind Sen. John McCaiin (R-Ariz.).
The exchange will be moderated by Linda Douglass, of the National Journal, Ron Brownstein, of Atlantic Media Company, and Chuck Todd, of NBC News. It is co-sponsored by Boeing. According to CUNA Political Director Trey Hawkins, by participating in the power breakfast series, CUNA assures that "insiders from Capitol Hill and in the Washington lobbying community are seeing credit unions in the thick of the political process."

CUNA Flawed Treasury plan would turn CUs into banks

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WASHINGTON (3/31/08)--The Credit Union National Association (CUNA) Sunday blasted a proposed U.S. Treasury financial regulatory overhaul which initial reports said would consolidate federal credit unions, national banks and federal thrifts into a single "federally insured depository institution" charter. The proposal ultimately would phase out the National Credit Union Administration and place banks and credit unions under one regulator’s oversight. CUNA President/CEO Dan Mica Sunday afternoon said the association was “astonished and angered” by its initial interpretation of the proposals, which he said “add up to more choices for Wall Street and less for consumers--and turn credit unions into banks.” Mica said Treasury’s proposal makes “no sense” for consumers, who would “pay more, and get less in return.” “The consolidation plan will only result in increased loan rates, decreased savings rates, higher fees, and the loss of a not-for-profit alternative for the nation's 90 million credit union members,” said the CUNA leader. Mica is scheduled to attend a briefing Monday morning with Treasury Secretary Henry Paulson to discuss the plan’s details, some of which were leaked to media outlets during the weekend. By Saturday night, a 22-page summary of the plan was posted on the New York Times, Washington Post, and CNNMoney websites. Treasury’s long-term recommendations, most of which would require legislation, call for reducing the number of federal financial regulators down to three:
* The Federal Reserve would focus on systemic risk within the financial system and would have oversight over all financial holding companies; * A “prudential financial regulator” would supervise the single “federal insured institutions” charter; and * A “business conduct regulator” would monitor conduct, including consumer protection, across all financial service companies.
Mica questioned the proposed changes to credit union regulatory oversight, and pointed out that “time and again, credit unions were the one type of financial institution that did not require government assistance or rescue.” “Credit unions are not the cause of today’s housing and credit crisis; indeed they have been lauded in the media and by policy makers for their performance and willingness to help consumers in these troubled times,” said the credit union leader. “It was no different during the Great Depression, the savings and loan crisis or any other turbulent economic period in our nation’s history since the formation of credit unions nearly 100 years ago.” Mica reiterated that any plan that would eliminate the credit union choice for consumers in the financial marketplace is “poor public policy and extremely shortsighted.” “We will immediately move to energize our grassroots and political activists in the entire credit union movement to oppose any effort that would lead to the termination of the credit union system,” said Mica, who also criticized the process Treasury used in developing its recommendations. “While Treasury did seek comment on general issues, it did not seek the financial services community's views on anything as specific as the plan now being unveiled,” he said. “Issues of this magnitude deserve more thorough consideration and discussion with the entities that will be impacted.” “As it is, Treasury has badly missed the mark,” said Mica. “CUNA will take whatever steps necessary to preserve the option of not-for-profit cooperative finance for the American consumer.” By Sunday evening, Mica in a letter to Secretary Paulson, had outlined CUNA’s objections to the proposal. Use the link below to read CUNA’s synopsis of the Treasury’s executive summary. CUNA will review the entire 200-page proposal after the Treasury releases it Monday.

Inside Washington (03/28/2008)

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* WASHINGTON (3/31/08)—Treasury Secretary Henry Paulson is scheduled to deliver remarks this morning addressing financial institutions and financial markets. The event will be available for viewing via webcast beginning at 10 a.m…. * WASHINGTON (3/31/08)—President George W. Bush participated in a HOPE NOW roundtable Friday followed by a tour of a mortgage counseling facility in Freehold, N.J. HOPE NOW, announced in October 2007 by Treasury Secretary Henry Paulson, is an alliance of mortgage servicers, mortgage counselors, government officials and non-profit groups intended to develop strengthened efforts to help struggling homeowners keep their homes. Bush visited Novadebt, a housing counseling agency approved by HUD and a participant in the HOPE hotline, 888-995-HOPE, which connects homeowners to free counseling services by trained non-profit counselors… * WASHINGTON (3/31/08)—Congress may just be coming back to Washington from a two-week district work break, but the agenda lawmakers face looks an awful lot like their work list from earlier this year. (CongressDailyPM March 27) In the Senate, high on the list during the eight weeks preceding a Memorial Day recess, are the Iraq war and economic issues. Senate Majority Leader Harry Reid of Nevada also intends to revisit the Democrats' housing stimulus legislation. The House schedule for next week is unclear at this time but Democratic leadership sources said legislation providing $50 billion for other countries to combat HIV/AIDS, tuberculosis and malaria is likely to be the only major bill on the floor. * WASHINGTON (3/31/08)—Sen. Barack Obama (D-Ill.), a contender for the Democratic presidential candidacy, said he would back an overhaul of the financial services regulatory system. Among many other ideas, Obama called for a streamlining of regulatory agencies. He said banks and other institutions should be supervised according to their business lines and that the regulatory framework, which he said has failed to protect homeowners, must be brought into the 21st century. (American Banker March 28)… * WASHINGTON (3/31/08)--The Small Business Administration announced Friday it has launched a new website for National Small Business Week 2008, which is April 21-25. The website offers information about the SBA’s annual celebration of small businesses and includes details about events in Washington, D.C. from April 21-23 and in New York City April 24-25. It provides information about the week’s schedule, topical sessions, event locations, award winners’ biographies and sponsor information. In addition, information for Small Business Week award winners will be accessible on member-only sections. The SBA, in a release announcing the website, highlighted an interactive blog feature that will allow sponsors and the public to post content about Small Business Week events. Up-to-the-minute highlights, multimedia content and information will be updated to the Web site during Small Business Week events in real-time, according to the SBA…

CUNA Banker stance on Realtors CU anti-consumer

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WASHINGTON (3/31/08)--The operating principal behind cooperative financial institutions is that people lend to each other for their mutual benefit. To be successful there needs to be members from many financial stratums, the Credit Union National Association (CUNA) said in a recently published letter to the American Banker editor. Bankers “get that” and that is what stands behind their constant push to have credit unions serve only “people of modest means,” the CUNA letter said. “(S)ince credit unions have no access to the capital markets, the only way to get the process going and to capitalize the institution is to have some members with money,” according to CUNA General Counsel Eric Robert. The CUNA letter was submitted to express credit unions’ “grave concern” regarding comments attributed by the newspaper to the head lobbyist for the American Bankers Association. Floyd Stoner was said to have hinted that the bankers association would challenge the application for a new credit union by the real estate agents' association. CUNA’s letter responded that credit unions "stand ready to defend the rights of consumers to pool their resources, in a cooperative structure, to form a credit union." And Richard warned readers to avoid attempts at “revisionist history.” “Modest means has never meant only low- to moderate-income people. It means people who are wage-earners, as indicated by the legislative history of the 1934 Federal Credit Union Act. “Current law does not limit credit unions to serving only people of modest means. It states credit unions are to serve consumers, especially those of modest means," he wrote, adding: “Bankers would serve themselves better to stop devising schemes to block the rights of consumers.” The National Association of Realtors (NAR) has submitted an application to form a credit union for its 1.36 million members and their families. The original American Banker story surmised that a Realtors' credit union could unite NAR and credit unions behind similar issues, creating "an even more potent lobbying force on issues such as expansion of credit unions' fields of membership and regulatory relief." That theory apparently was bolstered after House Financial Services Committee Chairman Barney Frank (D-Mass.) reportedly said at an ABA conference earlier this month, "Realtors and credit unions both have better grassroots organizations than banks do."

CUNA to reach more on BSA issues

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WASHINGTON (3/31/08)—The Credit Union National Association (CUNA) is attempting to reach even more credit unions to help them meet the complex compliance requirements under the Bank Secrecy Act (BSA). This year CUNA will conduct two Bank Secrecy Act conferences, one in Washington, D.C. May 18-21 and the other in Atlanta, Ga. Oct. 19-22. CUNA has been designing annual BSA conferences since 2005 to provide credit unions with the most up-to-date information available. New topics for the 2008 sessions include:
* An in-depth, hands-on look at developing an institution-wide BSA risk assessment; * How BSA due diligence before a merger can save a credit union from other pitfalls; * Shared branching and BSA; who is responsible for what; *ACH and wire issues; and * Alternative payment methods and problems that can develop.
This 2008 conferences will feature informative discussions on practical, operational compliance issues; open forums for question and answer; big picture compliance trends; overviews of common mistakes; and networking opportunities . In 2006, CUNA began offering participants an opportunity to become BSA certified via a test administered by CUNA. That certification option will be available at both 2008 sessions. For registration information, and more on BSA, use the resource links below.

Federation okd as HUD counseling intermediary

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WASHINGTON (3/31/08)–The Department of Housing and Urban Development (HUD) last week approved the National Federation of Community Development Credit Unions (Federation) as a federal housing counseling intermediary. The new HUD certification authorizes the Federation to take on a role that has been filled by the National Credit Union Foundation (NCUF) since 2003. Credit unions seeking federal grants to provide housing counseling now will apply through the Federation. The request to HUD to certify the Federation came from the NCUF. NCUF Executive Director Steve Delfin explained the reason for this transition: "Over the past five years, community development credit unions demonstrated the most success meeting HUD's criteria. So last year we included the Federation in our final HUD grant." Federation President/CEO Cliff Rosenthal said, “We’re grateful to the Foundation for introducing HUD to credit unions and to the Federation. Housing counseling is a crucial service to help consumers avoid the current mortgage crisis and potential foreclosures, and credit unions have an incredible opportunity to aid millions of Americans facing these problems.” He added that the Federation has both expertise and capacity to help credit unions become “even more effective as housing counseling agents.” The Federation’s “CU Breakthrough” consulting team will continue working with NCUF to provide technical assistance and training to HUD-certified credit unions during the last six months of HUD’s 2007 grant cycle, which extends through Sept. 30, 2008. Twenty-two credit unions are using this final HUD grant from NCUF to provide housing counseling for potential first-time homebuyers. Federation Senior Consultant Terry Ratigan is currently coordinating the 2008 HUD Housing Counseling grant application. Credit union applications are due on April 13 for a new grant cycle that begins on Oct. 1. For information on the new HUD grant application, credit unions can contact Ratigan at

New RESPA plan awaits CU comments

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WASHINGTON (3/28/08)—It has been a long wait, but the Department of Housing and Urban Development (HUD) has issued its revised proposal to amend Real Estate Settlement Procedures Act (RESPA) rules. HUD has been working since the late 1990’s on revising its rules implementing the 1974 RESPA law with a view to improving the mortgage process and to lower settlement costs for borrowers. The current proposal supplants one issued in 2002, scrapped by HUD after the Credit Union National Association (CUNA) and others noted that some of the proposed changes could be confusing to consumers and could have the opposite effect of the intended simplification. CUNA seeks credit union comment by May 2 on the on the recently issued proposed RESPA changes. HUD will accept public comment until May 13. The proposed rule would make significant changes to the Good Faith Estimate (GFE) form, resulting in a new format for the GFE. That change is intended to ensure that the estimates are more accurate and to facilitate consumer comparisons between lenders. These changes will also facilitate comparisons between the GFE and the HUD-1 or HUD-1A settlement statements. HUD also proposes to ensure that borrowers are aware of the final loan terms and costs at settlement by requiring lenders read to each borrower a copy of a “closing script” containing the information. The proposal would also clarify when it is appropriate to provide borrowers with discounts and average price costing of settlement services. The 2002 proposal would have permitted lenders to provide a package of settlement services that would have guaranteed a lump-sum price for all loan originator and government-required settlement costs associated with obtaining a mortgage, along with a guaranteed interest rate. CUNA and others strongly opposed this as it would have disadvantaged smaller lenders, and it is not included in this latest proposal. Use the resource link below for more on the RESPA proposal and to read CUNA’s comment call.

Inside Washington (03/27/2008)

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* WASHINGTON (3/28/08)—The Office of the Comptroller of the Currency has named William Haas deputy comptroller for midsize bank supervision Haas has been assistant deputy comptroller for that division since March 2003. He started his career with the OCC in 1984 in Grand Island, Neb. and was commissioned as a National Bank Examiner in 1988. In 1994, Haas transferred to Large Bank Supervision, where he served as the commercial credit lead examiner at Norwest Corporation, and later as a member of the credit team at US Bank. He will be based in Chicago in his new position… * WASHINGTON (3/28/08)—A Federal Deposit Insurance Corp. study published in the agency’s March 20 issue of FDIC Quarterly indicated that increasing municipal deposit insurance coverage would have benefits, such as reducing a bank's need to secure municipal deposits, but also could create risks for moral hazard and raise assessments. The study also asserted that while higher coverage would increase the safety of public funds held at depository institutions and would help small banks compete for municipal deposits; it also would have a downside. Increasing the limit would, for example, conflict with traditional agency principles, such as the FDIC "does not generally advocate favoring one depositor class over another." (American Banker March 27)... * WASHINGTON (3/28/08) -- Treasury Secretary Henry Paulson said in a recent speech that the Federal Reserve Board should broaden its authority and include Wall Street investment firms in its oversight. Investment firms are now regulated by the Securities and Exchange Commission (SEC). But former federal regulators are predicting that changes in the country’s financial system will increase the Fed’s influence at the expense of the SEC. A former SEC general counsel posited that his former agency would be so diminished that it would just be a component part of a comprehensive financial services regulator. The speculation has been prompted in part by the Fed’s action involving Bear Sterns. The Fed is taking nearly $30 billion in assets off the Bear Stearns balance sheet in an effort to encourage JPMorgan Chase & Co. to buy the firm, even though Bear Stearns's main supervisor is the SEC. ( March 27)…

2008 Regulatory Review List for CUs

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WASHINGTON (3/28/08)—The Credit Union National Association (CUNA) is asking credit unions to review their federal regulator’s recently published 2008 Regulatory Review List to identify particular operational or compliance problems. Each year, the National Credit Union Administration (NCUA) examines one-third of its regulations as part of this annual review process. The NCUA’s Office of General Counsel maintains the schedule that identifies the agency regulations up for review each year. Comments on this year’s batch of regulations subject for review are due to the agency by August 1. The rules under scrutiny include:
* Security Program, Report of Suspected Crimes, Suspicious Transactions, Catastrophic Acts, and Bank Secrecy Act (BSA) Compliance (Part 748); * Records Preservation Program and Records Retention Appendix (Part 749); * Loans in Areas having Special Flood Hazards (Part 760); and * Description of NCUA; Requests for Agency Action (Part 790).
For a complete list and more information, use the resource link below.

CUNA to testify on Internet Gambling plans

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WASHINGTON (3/27/08)—The Credit Union National Association (CUNA) is preparing to testify before a House subcommittee that will be looking into proposed regulations to implement the Unlawful Internet Gambling Enforcement Act (UIGEA). The House Financial Services subcommittee on domestic and international monetary policy, trade, and technology announced late Tuesday that it will conduct a hearing on UIGEA. Harriet May, president/CEO of GECU, El Paso, Tex.., has been invited to testify on CUNA’s behalf. She is secretary of the CUNA board of directors. The April 2 hearing is expected to highlight the burden the proposed regulations would place on financial institutions, as well as the problems regulators are facing in drafting implementation rules, a process that has been have been bogged down with complications and controversy. In October 2006, President George W. Bush signed the SAFE Port Act into law, a measure which included the language requiring credit card and other payment system companies to establish procedures to block customer transactions with online gambling sites. The Treasury Department and the Federal Reserve Board were jointly given responsibility to implement the law and were statutorily assigned 270 days to come up with a plan. However, no effective date was mandated. Under their joint plan, the agencies proposed to apply the rules to five payments systems: automated clearinghouse (ACH); money transmissions, check clearing, wire transfers and credit cards. Even with this scope of application, the agencies determined in their cost/benefit analysis that 7,609 of the nation's 8,477 credit unions would be affected by the new requirements. CUNA, in a comprehensive comment letter on the joint Treasury-Fed implementation plan, called the proposed rules “unworkable.” CUNA called for a moratorium on the implementation of the current proposal and recommended that the regulators work with Congress “to develop an approach that will meet public policy goals in a clearly understood manner and without inflicting undue hardships on the financial institution sector in the process.” CUNA testimony is expected to parallel the comment letter.

Inside Washington (03/26/2008)

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* WASHINGTON (3/27/08)--The Federal Deposit Insurance Corp. is preparing for a possible increase in failures that could result from current problems in the credit markets by working toward hiring 115 more employees for its division that handles bank resolutions. The agency also announced last month that it would rehire 25 of its retirees from that division. The two hiring moves would bring the number of division staff to 360, a 60% increase over current levels. (American Banker March 26)… * WASHINGTON (3/27/08)—Sen. John McCain of Arizona, the presumptive Republican presidential candidate, began outlining principles he would back to tackle the current problems stemming from the housing crisis. They included lender accountability for faulty loans and increased disclosure for mortgage applicants. Speaking to a roundtable for Hispanic small businesses in Southern California, McCain said he is opposed to reducing requirement for down payments for government-backed mortgages. He also backed the idea of national summits on mortgage lending and on mark-to-market accounting. McCain did little to clear any confusion about what specific plans he might back if his bid for the White House is successful, but said he will consider “any and all proposals” based on cost and benefits. (American Banker March 26)…

NCUA provides its piece to Mo. CU merger

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WASHINGTON (3/26/08)—The National Credit Union Administration (NCUA) granted preliminary approval this week of a voluntary merger between Region River CU, Jefferson City, Mo., and struggling Missouri Farmers Union CU (MFUCU), also of Jefferson City. The merger is expected to take effect as of April 1. The merger was approved March 24 by the Missouri Division of Credit Unions “pending the affirmation of the credit union’s share insurer, the National Credit Union Administration.” The NCUA is the administrator of the National Credit Union Share Insurance Fund. NCUA spokesman John McKechnie said Wednesday, “We wrote the state yesterday granting them preliminary approval to the proposed merger, subject to satisfaction of any requirements imposed by the state.” The state regulator’s short notice of approval in March also noted, “No vote of the membership is required due to the financial condition of the credit union,” referring to MFUCU, which has been struggling every quarter through its mere few years of existence. According to the Missouri Credit Union Association (MCUA), MFUCU, which opened two years ago, reported just $24,380 in net capital on $1.1 million in assets, a 2.2% capital ratio, for year-end 2007. The credit union, chartered to serve members of the state farmers cooperative, never attracted more than 180 members and had net income of just $7,100 for 2007, after a $16,900 loss the year before, MCUA said in its March 26 CourierNet. Rick Nichols, River Region president/CEO, told the league that his credit union had been assisting MFUCU since July 2007, “so it’s a good fit.” “Their board also wanted to offer their members some services that they wouldn’t be able to provide, but that River Region could,” he added.

SBA trolling for more comment on lender oversight

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WASHINGTON (3/26/08)—The Small Business Administration (SBA) this week announced a series of meetings intended to gather public comments on a proposed rule on lender oversight and credit risk management, which includes SBA's oversight of participants in the 7(a), 504 and Microloan lending programs. In October 2007, the SBA published a proposed rule to incorporate SBA's risk-based lender oversight program into SBA regulations and In December of that year extended the comment period on the proposed rule to Feb. 29, 2008. The comments submitted during that period are “greatly assisting SBA with its deliberations” on the proposal, according to an agency release. However, the series of comment meeting is intended to “broaden public participation by offering the public an opportunity to meet with SBA in person and communicate their comments.” The proposed regulatory framework was designed to enhance SBA's Office of Credit Risk Management's (OCRM) ability to maximize the efficiency of SBA's lending programs by effectively managing program credit risk, monitoring lender performance, and enforcing lending program requirements. It is SBA's intent that the proposed framework would also incorporate the mission of SBA to assist small business access to credit. Participants may request to comment orally or through a written statement. Oral comments will be limited to five minutes. The meeting format will consist of a panel of SBA representatives who will moderate the oral comments. The meetings kick off in San Francisco on April 1, although the official registration period for that session closed Tuesday. The next session is April 3 in Los Angeles. Use the resource link below for more information on the other comment meetings and registration details.

Inside Washington (03/25/2008)

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* WASHINGTON (3/26/08)—National Credit Union Administration board
NCUA board member Gigi Hyland addresses a Women and Housing and Finance luncheon in Washington. Her topic: foreclosure mitigation counseling program grants distributed through NeighborWorks America.
member Gigi Highland Tuesday discussed the efforts of NeighborWorks America to distribute $180 million in government grants to eligible organizations across the nation that provide foreclosure mitigation counseling programs. Hyland, who is a member of the NeighborWorks board of directors, explained during her speech before Women in Housing and Finance here, that the organization acts as a conduit to distribute the funds to the areas in most need. The group announced in February that $130 million had been awarded to 32 state housing finance agencies, 16 HUD-approved housing counseling intermediaries and 82 community-based NeighborWorks organizations, to provide counseling to families and individuals facing the threat of foreclosure. It estimated that 350,000 to 400,000 troubled borrowers will be directly assisted through the counseling funding … * WASHINGTON (3/26/08)—Sen. Hillary Clinton (D-N.Y.) has endorsed a housing stabilization plan by House Financial Services Chairman Barney Frank (D-Mass.) and Committee Senate Banking Committee Chairman Chris Dodd (D-Conn.). The plan would expand the Federal Housing Administration (FHA) so it could back mortgages whose principal and interest rates had been written down. In a speech in Philadelphia, the Democratic presidential candidate-contender said aggressive action is needed to help borrowers avoid foreclosure. The government, she said, should temporarily purchase the troubled loans and the Bush administration should instigate an emergency study of whether the government should temporarily buy loans to sell in bulk auctions (American Banker March 25)… * WASHINGTON (3/26/08)—The Federal Deposit Insurance Corp. is floating a new plan under which the agency would operate if it were to return excess premiums to the banking industry. The plan is a compromise between earlier proposals that were not well received by the industry. Back in September, the FDIC issued an advance notice of proposed rulemaking detailing two rebate plans; one which favored older banks, another which benefited new ones, such as those chartered after 1996 or those that had increased their deposits rapidly in the ensuing decade. Under its newest version, the FDIC would use two factors to determine a bank’s rebate: its share of the December 1996 assessment base and its premiums in the five years leading up to the rebate. The 2006 deposit insurance reform law requires the FDIC to start issuing premium rebates when its reserves go higher than 1.35% of insured deposits. (American Banker March 25) … * WASHINGTON (3/26/08)--CongressDaily reported in its Monday edition that House Ways and Means Chairman Charles Rangel (D-N.Y.) was hospitalized earlier this month not because of the flu, as first thought, but because he was suffering from viral encephalitis. A Rangel spokesman said the congressman was recovering and expected back in Congress when it resumes session next Tuesday… * WASHINGTON (3/26/08)-- Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Sen. Patty Murray (D-Wash.), who chairs the Senate Appropriations transportation and HUD subcommittee, are claiming Housing and Urban Development Department Secretary Alphonso Jackson is not fit for his job and should be fired by President George W. Bush. The two Senate leaders sent a letter to the White House March 21 after Jackson refused to answer certain questions during two hearings by their respective panels. Jackson was queried on allegations that he is steering contracts improperly to friends (American Banker March 25)…

NCUA issues prohibition orders

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ALEXANDRIA, Va. (3/26/08)—The National Credit Union Administration (NCUA) Tuesday announced it has issued orders against two individuals, which prohibit them from participating in the affairs of any federally insured financial institution. The individuals are:
* Debra Elaine Finney, a former employee of GAF FCU, Dallas, Tex., who consented to a prohibition order without admitting or denying fault; and * Sara B. Risewick, a former employee of St. Pius X Church FCU, Rochester, N.Y., who pled guilty to falsifying business records at the credit union and was sentenced to 5 years of supervised probation.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. Use the resource link below to view enforcement orders posted to the NCUA’s website.

CUNA gives NCUA Outreach report full review

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WASHINGTON (3/26/08)—The Credit Union National Association's (CUNA's) Governmental Affairs Committee this week is meeting to assess the National Credit Union Administration's (NCUA's) Outreach Task Force recommendations. That meeting follows work and discussion performed by CUNA subcommittees on federal credit unions, community credit unions, and examination and supervision. The CUNA board’s executive committee will be considering the GAC’s recommendations early next week. In February, the NCUA released its report which contained some recommendations that have generated deep concerns among some credit unions, including mandatory disclosure of executive compensation. “CUNA has been communicating these concerns directly to the NCUA board on an ongoing basis,” said CUNA President/CEO Dan Mica, and CUNA has taken the report to the credit union and league representatives on its key policy-making committees. “Our review process fully represents the diverse regions, charter types, asset sizes and other characteristics of U.S. credit unions," said Mica. "This process ensures that CUNA's ultimate response to the recommendations in the report are not just an instinctive reaction, but reflects the views of the many segments of our movement,” he added. Mica also noted CUNA’s efforts regarding the NCUA's advance notice of proposed rulemaking on conversions, mergers, hostile takeovers, board fiduciary duties and other corporate governance issues. He said CUNA is exploring credit union concerns and assured those concerns would be reflected in comments due NCUA by April 30. Use the resource link below for CUNA’s summary of NCUA’s Outreach Task Force Report.

CUs and the economy Webinars by CUNA

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WASHINGTON (3/25/08)—The Credit Union National Association (CUNA) is developing a series of webinars to help credit unions understand the impact to their operations from the current turn in the nation’s economy. CUNA will launch its series of live informational sessions in April. The first webinar will present an overview of current and prospective economic factors. Subsequent sessions, likely to be offered on a weekly basis, will address more specific topics, such as the effects of economic conditions on consumer lending, mortgage lending, and examination issues. CUNA Chief Economist Bill Hampel, announcing the webinar plan Monday, noted that the current turn in the economy is having “a significant impact” on credit union operations. CUNA Deputy General Counsel Mary Dunn added that CUNA is also meeting with National Credit Union Administration (NCUA) board members and senior staff encouraging the agency to provide more guidance to credit unions. Specifically, CUNA is seeking clarification on the parameters of what a credit union can do to help with troubled mortgages. Hampel noted a 2006 NCUA letter assuring federal credit unions that it is not necessary to reach a 1% return on assets (ROA) just to achieve the highest CAMEL 1 rating. He added, “In turbulent times like this, the NCUA does have a role to be concerned regarding the share insurance fund. Our job is to remind them that we have members to worry about.” Further details on the webinars will be reported in News Now as available.

Court upholds FCRA prescreening process

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WASHINGTON (3/25/08)—An appeals court recently upheld a lower court ruling that Greenwood FCU, of Warwick, R.I., behaved properly under the Fair Credit Reporting Act (FCRA) in its “prescreened” offer of credit to members. The First Circuit Court of Appeals dismissed a class action lawsuit against Greenwood that claimed a certain credit offer for a mortgage loan was not permissible under the FCRA. The class action charged that the offer did not contain sufficient information regarding the loan terms to be considered a “firm offer” and therefore the credit union should not have been allowed even limited access to the members’ credit report information without the person’s consent. If the plaintiff had prevailed the credit union would have had to pay either actual damages or a penalty of between $100 and $1,000 per person solicited with a prescreened offer. The issue in the case was whether the plaintiff was entitled to the penalty as there was no claim that he was wrongfully denied credit, according to Jeff Bloch, senior assistant general counsel for the Credit Union National Association (CUNA). The Court reviewed the term “firm offer of credit” in the relevant provisions of the FCRA and concluded there is no requirement that these types of offers must provide the specific terms for credit, such as the interest rate and duration of the loan. Under the FCRA, the term only means that the creditor will not deny the loan if the consumer meets the creditor’s pre-selection criteria. “Although this ruling will not reduce the number of prescreened offers that consumers receive, the FCRA does permit consumer’s to opt-out of these offers,” Bloch said noting 2005 rules issued under the Fair and Accurate Credit Transactions Act that enhanced the disclosure of these opt-out rights.

CUNA backs housing stabilization plan

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WASHINGTON (3/25/08)—A homeownership retention plan being drafted by Rep. Barney Frank (D-Mass.) could benefit many consumers facing mortgage foreclosures and credit unions stand ready to help, the Credit Union National Association (CUNA) said in a letter to the plan’s designer Monday. Addressing Frank, CUNA President/CEO Dan Mica reminded the House Financial Services Committee chairman that credit unions have not made the types of mortgages that provided the impetus of the current economic downturn. However, Mica stressed, credit unions stand willing and able to assist homeowners facing foreclosure. Under Frank’s FHA Housing Stabilization and Homeownership Retention Act proposal, the Federal Housing Administration (FHA) would be allowed to guarantee written-down mortgages. CUNA said this provision would be an appropriate tool to help struggling homeowners given the current economic situation and would act as incentive for more lenders to accept mortgage write-downs. “In general, credit unions are doing whatever they can to help borrowers trapped in mortgages they cannot afford, but cannot responsibly make loans to members in excess of the value of the borrower’s home,” Mica wrote, explaining CUNA’s support of Frank’s plan that could enable credit unions to do more for their members. Mica encouraged Frank to consider another action that would “greatly enhance” the ability of credit unions to provide assistance to troubled mortgage borrowers: subject credit unions to a risk-based capital system. “A risk-based system, like the one proposed in H.R. 1537 (the Credit Union Regulatory Improvements Act, known as CURIA), would more accurately reflect the capital needed for a credit union to be considered well capitalized and free additional capital to help borrowers refinance mortgages they received from other lenders. “Risk-based capital for credit unions would be a safe and sound tool for credit unions to use to provide even more assistance to homeowners facing foreclosure,” Mica noted. The CUNA letter also recommended that a consumer counseling component to the program could only enhance its benefit to consumers. Use the resource below to read the CUNA letter.

Inside Washington (03/24/2008)

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* WASHINGTON (3/25/08)—The Supreme Court Monday refused a plea by the California Public Employees' Retirement System (Calpers) to reinstate a rejected part of its lawsuit against the New York Stock Exchange. Calpers is the lead plaintiff in a class-action lawsuit against the NYSE over the "specialist" stock-trading scandal. The seven specialists firms that operate on the NYSE floor were fine $245 million by the Securities and Exchange Commission as part of a trading scandal and the exchange itself was censured by the SEC. (Wall Street Journal March 24)…

Inside Washington (03/21/2008)

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* WASHINGTON (3/24/08)--The Treasury Department will expand savings opportunities for investors beginning with 13- and 26-week bill auctions April 7. All Treasury marketable bills, notes, bonds, and Treasury Inflation-Protected Securities will be available to the public in minimum and multiple amounts of $100. The new minimum and multiples will apply to outstanding Treasury marketable securities April 7. Previously, the securities could only be transferred in increments of $1,000 ... * WASHINGTON (3/24/08)--Federal bank, thrift, credit union and Farm Credit System regulatory agencies requested public comment Friday on new and revised interagency questions and answers on flood insurance. The proposed changes include modifications to questions and answers about construction loans and condominiums. New questions and answers also are proposed for second lien mortgages, imposition of civil money penalties and loan syndications/participations. Comments are due May 20 ...

Mica to speak on cooperative advocacy

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WASHINGTON (3/24/08)—Credit Union National Association (CUNA) President/CEO Dan Mica will lead a session on public policy and advocacy for cooperative concerns at the Annual Cooperative Conference here May 1. The conference, conducted by the National Cooperative Business Association (NCBA), will feature speakers on topics such as co-op governance, global accounting standards, public policy and implementing innovative marketing strategies. The Cooperative Conference also is intended to provide an opportunity for cooperative personnel to network with representatives from the full spectrum of cooperatives in the United States. “The annual conference is a keystone event for NCBA and for our members,” said Paul Hazen, NCBA president and CEO. “Our members from all over the country come to D.C. to engage with cooperative-minded leaders, educate themselves and others on the critical issues pertaining to cooperatives, and also build relationships that foster a greater awareness of the value of cooperative business.” In addition to Mica’s session on advocacy for cooperatives, the conference will feature sessions on cooperative governance, global accounting standards, collaboration efforts, and how to build visibility and credibility, among other topics. For more information on NCBA’s Cooperative Conference, use the resource link below.

CU presence remains on FASB small-business committee

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WASHINGTON (3/24/08)—Credit union executive Scott Waite has been appointed for a second term on the Financial Accounting Standards Board’s (FASB’s) Small Business Advisory Committee (SBAC). Waite is chairman of the Credit Union National Association’s (CUNA's) Accounting Task Force, as well as chief financial officer of Patelco CU in San Francisco. When appointed in 2004, Waite became the first credit union representative on the SBAC. He is also CUNA's representative on the FASB Advisory Council. FASB is the primary private-sector organization that establishes standards of financial accounting and reporting in the U.S. Its standards govern the preparation of financial reports for all public and private enterprises. As a member of FASAC and the SBAC, Waite advises the FASB on how issues related to Generally Accepted Accounting Principles (GAAP) will affect credit unions.

Webinar for state pandemic flu planning

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WASHINGTON (3/24/08)—The federal government is offering two live webcasts in upcoming weeks to help state planners in their next round of pandemic influenza planning. The webcasts, organized by the U.S. Department of Health and Human Services, will be on April 2 and April 30 and no registration is required. On March, the government issued new guidance for the second round of state pandemic planning assessments. These scheduled webcasts are intended to provide an overview of the guidance and offer an opportunity for a question-and-answer sessions with experts. Interested parties may email questions for the webcast panelists during the program to, and are asked to include first name and hometown. States and U.S. territories have until June 16 to submit draft operational plans. The draft plans will be reviewed by relevant federal agencies and states will then be allowed to make revisions.

CUNA NC league join in bankruptcy suit

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WASHINGTON (3/24/08)—The Credit Union National Association (CUNA) and North Carolina CU League (NCCUL) have filed a joint amicus brief in support of Coastal FCU, Raleigh, and its lawsuit involving a bankruptcy reaffirmation agreement. The credit union has a case on appeal in the U.S. District Court for the Eastern District of North Carolina. Coastal FCU is the 2nd largest credit union in its state with over $1.7 billion in assets and over 160,000 members. The case involves a member’s automobile loan from the credit union made in February 2005. The borrowers filed a Chapter 7 bankruptcy in May 2007 and signed a reaffirmation agreement with the credit union, without representation by an attorney, in order to retain their automobile. Because the debtors were not represented by an attorney during negotiation of the reaffirmation agreement, the court scheduled a hearing to determine whether the reaffirmation agreement imposed an undue hardship on the debtors, according to Mike McLain, CUNA’s assistant general counsel and senior compliance counsel. The situation could also arise where debtors are not represented by an attorney at all during the bankruptcy process. The court declined to approve the reaffirmation agreement and stated that the debtors could retain the automobile as long as the loan was not delinquent and they continued making payments. “The Court’s decision essentially revived the ‘ride-through’ that was eliminated by the new bankruptcy law enacted through the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA),” McLain said. He added that Coastal’s brief in the appeal, as well as the CUNA-NCCUL amicus brief, argue that Congress intended to eliminate the ‘ride-through’ when it enacted the BAPCPA. The term refers to an interpretation of former bankruptcy laws that permits a debtor to keep the loan collateral, such as an automobile, without either reaffirming the debt or redeeming the loan as long as timely payments continue. Today most courts, McLain said, interpret that law to say there are just three valid actions, which are: surrendering the collateral with no further liability; keeping the collateral through a reaffirmation agreement; or redeeming the collateral through a lump-sum payment. “Most bankruptcy courts agree that the BAPCPA eliminated the ride-through option and now requires debtors that wish to retain possession of the collateral to do so through either redemption or reaffirmation. “However, a small number of courts have now created a new ride-through option, as in the Coastal FCU case, where the court refuses to approve the reaffirmation agreement, rendering it unenforceable,” McLain explained. He added that these courts reason that where the debtor has complied with the requirements of the bankruptcy code and the only reason the debtor has not performed his or her stated intention of reaffirming the debt is because of the court’s refusal to approve the reaffirmation agreement, the stay will not terminate and the debtor may retain the collateral as long as payments are made pursuant to the terms of the loan agreement. The Coastal and CUNA-NCCUL briefs, filed Feb. 26, also maintain that a creditor should be allowed to repossess collateral where a debtor has not truly reaffirmed a debt because the court fails to approve such a reaffirmation making it unenforceable.

NCUA wants input on guidance to bar convicts at CUs

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ALEXANDRIA, Va. (3/21/08)—-The National Credit Union Administration (NCUA) Board during its monthly meeting Thursday issued for a 60-day comment period proposed guidance on prohibition orders barring an individual from working with a federally insured credit union. The NCUA Board issued proposed Interpretive Ruling and Policy Statement (IRPS) No. 08-1, Guidance Regarding Prohibitions Imposed by Section 205(d) of the Federal Credit Union Act. The statute prohibits “a person who has been convicted or legally connected with prosecution of a criminal offense involving dishonesty or breach of trust from working or being affiliated with an insured credit union, except with prior written consent from the NCUA Board,” said the agency. NCUA said it has not previously published policies or regulations concerning Section 205(d) and recently became aware of several employees working at credit unions in violation of this prohibition. The three NCUA Board members voted unanimously in favor of the measure. Visit CUNA’s website for more information.

UBIT lawsuit scheduling date set

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GREEN BAY, Wis. (3/21/08)--A Wisconsin credit union’s lawsuit against the Internal Revenue Service (IRS) over unrelated businesses income taxes (UBIT) took another step forward this week when the case was assigned to a judge and a scheduling date set. The case involves Community First CU, Appleton, Wis., which filed a court challenge in January against the IRS regarding its determination on insurance products. This week, CUNA learned that U.S. District Court Judge William C. Griesbach will handle the case. A scheduling conference was set for May 9. According to CUNA General Counsel Eric Richard, the scheduling conference will allow the judge to set the future course of litigation. “After May 9, we should have a much better idea of when we might have a final outcome in the case in the district court,” said Richard. The credit union said at issue is about $54,000 in taxes it paid in 2006 on income from the sale of credit life and credit disability insurance, and guaranteed auto protection (GAP) insurance. While it is unlikely any outside parties will be allowed to join the suit, the credit union's action is backed by CUNA, American Association of Credit Union Leagues, National Association of State Credit Union Supervisors NASCUS), and CUNA Mutual Group, which comprise the credit union movement's UBIT Steering Committee.

Realtors CU application fans lobbying alliance buzz

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WASHINGTON (3/21/08)--The National Association of Realtors (NAR) efforts to launch a credit union has raised the ire of bankers and hinted at a brewing powerful lobbying alliance on Capitol Hill, according to a newspaper report. The story in the March 20 American Banker newspaper sprouted after NAR last week applied to the National Credit Union Administration (NCUA) for a federal credit union charter to serve its 1.3 million members and their families nationwide. NAR in November voted to fund the credit union initiative with a $10 million grant (News Now Nov. 28). The Internet-based credit union would offer a complete array of services, including mortgages, auto loans and deposit accounts. The American Banker story surmised that a Realtors’ credit union could unite NAR and credit unions behind similar issues, creating “an even more potent lobbying force on issues such as expansion of credit unions' fields of membership and regulatory relief.” That theory apparently was bolstered after House Financial Services Committee Chairman Barney Frank (D-Mass.) reportedly said last week at an American Bankers Association conference, “Realtors and credit unions both have better grassroots organizations than banks do.” Bank lobbyists indicated they may oppose NAR’s application to form the credit union, according to the report.

Frank Big changes needed in financial regulation

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WASHINGTON (3/21/08)--In the wake of recent financial market turmoil, House Financial Services Committee Chairman Barney Frank (D-Mass.) yesterday called for a number of new policy options he said would help stabilize the housing market and address the current economic downturn, including creating a new or empowering the Federal Reserve to act as a ”Financial Services Systemic Risk Regulator.” In a speech in Boston Thursday, Frank said he wants to give the new regulatory body “capacity and power to assess risk across financial markets regardless of corporate form and to intervene when appropriate.” He said since the repeal of Glass-Steagall, a host of new players have emerged and old ones are doing new things. “To the extent that anybody is creating credit they ought to be subject to the same type of prudential supervision that now applies only to banks,” said Frank. This regulator also must focus on enhanced consumer protection, because “this crisis shows that consumer protection, safety and soundness and systemic risk are intertwined,” according to Frank. Frank also indicated a willingness to consolidate what he called “a duplicative regulatory structure,” but provided little detail in a written statement Thursday. Federal and state credit union regulators were not mentioned. The committee chairman called for a reassessment of capital, margin and leverage requirements because “this crisis has illustrated that seemingly well-capitalized institutions can be frozen when liquidity runs dry and particular assets lose favor.”

Inside Washington (03/20/2008)

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* WASHINGTON (3/21/08)--The Office of the Comptroller of the Currency (OCC) issued an emergency rule Wednesday that would allow JPMorgan Chase and Co. to fund Bear Stearns even though the debt would be higher than the normal lending limit. An OCC provision states that a bank cannot lend more than 15% of its capital to one borrower or more than 25% without secured collateral (American Banker March 20). The OCC defends its decision, saying that the limit was not broken. An interim final rule, scheduled to be effective yesterday and open for a 30-day comment period, would give the agency the ability to grant exemptions in emergency situations to well-capitalized and highly rated lending institutions ...

Inside Washington (03/19/2008)

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* WASHINGTON (3/20/08)--The Small Business Administration (SBA) yesterday released a revised Standard Operating Procedure manual for lenders and development company loan programs. The document was reorganized and cut to 400 pages from 1,000. The electronic version can be downloaded as a PDF. Though the agency made significant structural changes, policy changes and clarifications to the document were limited ... * WASHINGTON (3/20/08)--The Federal Deposit Insurance Corp. (FDIC) has expressed concerns about commercial real estate (CRE) lending in a financial institution letter. Given the weakness in the housing market, banks with CRE concentrations should take steps to strengthen their overall risk-management framework and maintain strong capital and loan allowances, said FDIC Chairman Sheila Bair ... * WASHINGTON (3/20/08)--Freddie Mac is looking for comment from the mortgage industry on the Home Valuation Code of Conduct, which provides standards designed to improve appraiser independence. The code is being adopted as a part of a March 3 agreement with the New York Attorney General and the Office of Federal Housing Enterprise Oversight. Starting Jan. 1, 2009, the enterprise will buy mortgages only from lenders who adopt the code. Comments most be postmarked by April 30 ... * WASHINGTON (3/20/08)--The U.S. Census Bureau is reminding U.S. businesses which received the 2007 Economic Census form that the forms must be returned within 30 days of receiving it. The old deadline was Feb. 12, and in most cases, the March reminder includes a fresh copy of the required form. Businesses can get help with their form, via the U.S. Census Bureau website or by calling 800-233-6136 from 8 a.m. to 6 p.m. ET, Monday through Friday...

Regulators update business continuity manual

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ALEXANDRIA, Va. (3/20/08)—-The National Credit Union Administration (NCUA), as part of the Federal Financial Institutions Examination Council (FFIEC), has updated its business continuity planning booklet for financial institutions. The updated information is included in the “Business Continuity Planning Booklet,” which was issued in March 2003. The guidance is intended to help examiners, financial institutions, and technology service providers identify business continuity risks and evaluate controls and risk management practices for effective business continuity planning, according to the agency. NCUA said the revised booklet includes enhancements to the business impact analysis and testing discussions, and addresses emerging threats and “lessons learned” in recent years. The booklet also stresses the responsibilities of each institution’s board and management to address business continuity planning. The must consider technology, business operations, communications, and testing strategies for the entire institution. Key elements of the FFIEC’s December 2007 Interagency Statement on Pandemic Planning have been added to the booklet. Access electronic versions of the “Business Continuity Planning Booklet” and other examination handbooks using the link below.

GAC photos available online for attendees

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WASHINGTON (3/20/08)--Attendees of this year's 2008 CUNA Governmental Affairs Conference (GAC), held March 2-6 in Washington, D.C., now can view hundreds of scenes from the event and order photographic prints. After more than 30 years at the Washington Hilton, CUNA brought its GAC—and a record-breaking crowd—to the Washington Convention Center this year. More than 4,500 credit union activists attended the event, including a record 580 first-time attendees. CUNA also has made available online copies of the association's daily on-site conference publication, GAC Daily. Use the resource links below to access both.

Visa IPO presents unique situation for CUs

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WASHINGTON (3/19/08)—As the Visa Inc. initial stock offering was set to hit the markets this morning--at $44 a share--credit unions prepared to accept and hold Visa stock issued to them in connection with the card giant’s conversion to public ownership. The Visa offering presents a unique situation for credit unions. Generally, the Federal Credit Union Act does not authorize federal credit unions to invest in the stock of companies other than credit union service organizations (CUSOs) and Visa Inc. is not a CUSO. However, as Visa’s plans for an initial public offering (IPO) advanced, the National Credit Union Administration (NCUA) in 2007 issued a legal opinion letter that cleared federal credit unions for the stock deal. In the letter addressed to Visa Inc. General Counsel Joshua Floum, the NCUA wrote: “Members will not compensate Visa Inc. for the stock, will receive the stock without taking further any action, and no cash or other rewards to members are available in lieu of the stock." Under the IPO plan, Visa U.S.A. becomes a subsidiary of Visa Inc. as part of the restructuring and its members will receive stock in Visa Inc. calculated on the basis of fees a member institution has generated in the past, according to the letter. The NCUA cautioned that federal credit unions may receive and retain the stock unless "its examiner determines holding the stock is a safety and soundness problem for that federal credit union." State-chartered credit unions, the NCUA said, should consult with the appropriate state supervisory agency about “the permissibility of their receipt of stock and any regulatory restrictions that may apply." In January, the Credit Union National Association’s (CUNA’s) Accounting Task Force issued an analysis of the complex accounting issues associated with treatment of VISA Class B stock. Task Force Chairman Scott Waite, who is also SVP-CFO of Patelco CU, San Francisco, has urged all credit unions affected by the stock offering ultimately to consult their own accountants for specific guidance for their situations. However, Waite and the task force offer these following tips for credit unions:
* Financial institutions should record their investment in Visa USA common stock received at its historical cost (carryover basis) which is most likely $0 (per SEC); * When and if recognized in 2008, the stock exchanged from Visa USA common stock to CLASS B common stock should be recorded at its carryover basis, in other words $0 (per SEC); * A liability should be established in 2007 for both the Amex settlement and the Discover estimate per FIN 45 and FAS 5; * The amounts are $2.065 billion for AMEX and $650 million for Discover – as disclosed, recorded, and SEC filed by VISA with the SEC; * Technically a FIN 45 liability should also be established for the remaining pending litigation; * A charge should be taken through earnings; * The amount is an estimate but should be generally based on an institution's membership proportion of interest in Visa USA times the AMEX and Discover amounts; * Despite the outcome of the IPO and its potential stock value, the restructuring agreement (already in effect in 2007) contains an indemnification clause (see VISA SEC filings S4 page 96 and VISA SEC filing 10K, item 3, page 49) that is now being considered the member's guarantee to pay as its liability, not VISA's; * The escrow will be funded when and if the IPO is completed by calculating a pro rata reduction of the stock held by financial institutions that may be converted to CLASS A stock so that the escrow account will have a balance to pay the litigation settlement. We understand that the SEC has indicated that the pro rata value of stock deposited in the escrow account should be considered "as if sold" and a gain recorded when the IPO is complete but only to the extent that a FIN 45 and FAS 5 liability was previously recorded. Or course this makes a timing difference in the recognition of the litigation indemnification and the gain of the conversion ratio of the shares used to fund the litigation escrow; and * The payment of the litigation costs by Visa members in the form of receiving less stock (net proceeds) still constitutes a payment by the members regardless of any exchange of cash.
This CUNA information is based on the general conclusion that there will be carryover basis in the stock in 2008 and a liability for the fourth quarter of 2007 for the indemnification of litigation losses, Waite stated.

April hearing on Franks housing rescue bill

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WASHINGTON (3/20/08)—The House Financial Services Committee Tuesday announced an April 9 hearing on the economic, mortgage and housing rescue plan announced last week by that committee’s chairman, Rep. Barney Frank (D-Mass.). Witnesses will include federal regulators, academics, economists and representatives of cities and communities that are being impacted by high numbers of foreclosures, according the committee’s announcement. The proposal, unveiled March 13 by Frank and Senate Banking Committee Chairman Christopher Dodd (D-Conn.) at a joint conference, seeks to address the rising tide of mortgage foreclosures. According to the release, the three main portions of the plan would:
* Permit the Federal Housing Authority (FHA) to provide [up to $300 billion] in new guarantees that would help to refinance at-risk borrowers into viable mortgages. In exchange for the agreeing to a substantial write-down of principal, the existing lender or mortgage holder would receive a short payment from the proceeds of a new FHA guaranteed loan if the restructured loan would result in terms that the borrower can reasonably be expected to pay: * Permit the loan program to be used to refinance and guarantee mortgages through a facility that would provide for auction or other mechanism to refinance loans on a bulk basis; and * Provide $10 billion in loans and grants for the purchase and rehabilitation of vacant, foreclosed homes with the goal of occupying them as soon as possible.
Use the resource link below to read Frank’s announcement of the rescue plan.

Cummings signs on as CURIAs 148th

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WASHINGTON (3/19/08)--Rep. Elijah Cummings (D-Md.) signed on last week to support the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537), bringing the number of signatures in support of the House bill to 148. Earlier this month, the Maryland and District of Columbia Credit Union Association brought 80 credit union officials to make a round of Capitol Hill visits arranged in conjunction with the Credit Union National Association’s (CUNA’s) Governmental Affairs Conference here. At that time, when the group met on credit union issues with Cummings, the lawmaker noted that he believes credit unions are a bridge that help people cross over financial difficulties to meet goals and attain wealth. CUNA VP of Legislative Affairs Ryan Donovan, noting that the CURIA co-sponsor list is on the precipice of reaching 150, warned Tuesday that there are no “magic numbers” when it comes to lawmakers’ support for the important credit union bill. “Credit union advocacy for regulatory improvements has to remain constant and at a high level until we accomplish the changes that are necessary to better serve credit union members,” Donovan said. Among changes proposed by CURIA:
* Clarify the 1998 Credit Union Membership Access Act to allow all credit unions, regardless of charter type, to serve those in underserved areas. The bill would also update the definition of an underserved area, incorporating definitions from the Community Development Financial Institutions Act and the New Markets Tax Credit; * Increase the current cap on loans to members for business purposes (MBLs) from 12.25% to 20% of assets, allowing credit unions to assist more members start and expand small businesses and to promote economic growth. The bill would also exempt loans under $100,000 and those to nonprofit religious organizations from the MBL calculation; * Establish additional consumer safeguards in the event of a credit union conversion to another form of financial institution; and * Reform the National Credit Union Administration's original prompt corrective action system to a risk-based approach more closely resembling the current Federal Deposit Insurance Corp. capital standard for banks.
“CUNA continues to work for the broadest possible support in both the House and Senate for important credit union legislation and continues to encourage leagues and credit unions to contact their federal lawmakers—especially over the Spring recess," Donovan added. Congress adjourned for a Spring District Work Break from March 17 through 28.

Inside Washington (03/18/2008)

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* WASHINGTON (3/19/08)--Homeownership among the underserved must increase, Rodney Hood, vice chairman of the National Credit Union Administration (NCUA) emphasized Thursday at a Santee Sioux Tribe town hall meeting. The meeting, hosted by the MidAmerica Credit Union Association, briefed Hood on the tribe’s effort to charter a new federal credit union on the reservation to help tribal members. “From an economic standpoint, lifting homeownership rates for all Americans has never been more important. Owning a home is the foundation of wealth creation for families and is their quickest path to self-sufficiency,” Hood said. He then thanked credit unions for their help in promoting economic empowerment ... *
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WASHINGTON (3/19/08)--Forty-six credit union CEOs, senior staff and volunteers from Kentucky attended the Credit Union National Association’s Governmental Affairs Conference in Washington, D.C. March 2-6, according to the Kentucky Credit Union League (By the Way March 2008). During their Hill visits with lawmakers, this group of Kentucky attendees met with Rep. Geoff Davis (R-Ky.) on the steps of the Capitol. (Photo provided by the Kentucky Credit Union League) ...

Compliance Issues from risk Assessment to reg Z

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WASHINGTON (3/18/08)—Credit union compliance experts have readers humming “The Alphabet Song” in the March issue of Credit Union Magazine, as they provide a complete A through Z guide of 2008 compliance issues. With only one noticeable cheat – “K” is for “Kongress” –the article explores a wide range of regulatory developments, examiner concerns, and potential congressional action that will affect credit union operations this year. From “Assessment of Risk” to “Regulation Z,” the article brings credit unions up to date on the most important compliance issues credit unions will face this year—including Bank Secrecy Act, foreclosure, mortgage reform and unrelated business income tax challenges. Use the resource link below to access the article authored by Kathy Thompson, senior vice president, compliance and legislative analysis, and associate general counsel; Mike McLain, assistant general counsel; Valerie Moss, director of compliance information; Nichole Seabron, federal compliance counsel; and Paulette Young, regulatory affairs specialist.

CU participation in HOPE NOW encouraged

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ALEXANDRIA, Va. (3/18/08)—The National Credit Union Administration (NCUA) is encouraging federally insured credit unions servicing securitized subprime adjustable rate residential mortgages to utilize the HOPE NOW alliance’s loan modification standards to report foreclosure prevention efforts. HOPE NOW is an alliance of major mortgage servicers, mortgage counselors, government officials and non-profit groups intended to develop strengthened efforts to help struggling homeowners keep their homes. It was formed under the direction of the Treasury Department in October 2007. In a letter to federal credit unions (Letter No. 08-CU-05), NCUA Chairman JoAnn Johnson wrote that the HOPE NOW reporting format will assist industry efforts of measuring foreclosure prevention activity by standardizing data fields regarding modifications of subprime adjustable rate residential real estate loans. Further, she said, it will help to foster more transparency throughout the securitization market as the financial industry moves forward collectively through this current mortgage crisis. “The NCUA supports the data collection efforts related to the HOPE NOW alliance and believes prudent workout arrangements are generally in the long-term best interest of both the credit union and the borrower,” the letter said. Johnson added that her agency also encourages federally insured state-chartered credit unions to be responsive to other data and information requests designed to track loss mitigation efforts. She said those efforts include the State Foreclosure Prevention Working Group, formed in the summer of 2007 by the offices of 37 state attorneys general and several state banking regulators to encourage solutions to the growing foreclosure crisis.

Credit unions stand firm No CRA requirements

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WASHINGTON (3/18/08)—Credit unions meet the financial needs of the broad spectrum of people that fall within their fields of membership, and they play an active role in community development and growth. Therefore, it is unnecessary to impose another layer of regulatory burden through Community Reinvestment Act (CRA) requirements, asserted President/CEO Dan Mica of the Credit Union National Association (CUNA). House Financial Services Committee Chairman Barney Frank (D-Mass.) broached the topic of CRA last week in an article in CongressDaily. Frank, who conducted a 30-year anniversary hearing on CRA Feb. 13, acknowledged that interest among lawmakers for taking on any type of expansion of CRA this year has dwindled.. Yet, he said the committee will look again next year at the “CRA-credit union issue.” CUNA’s Mica said, “Chairman Frank has himself said that if every financial institution were similar to a credit union, CRA would be unnecessary. With that in mind, we continue to believe that CRA is unnecessary for credit unions, and CUNA remains opposed to including credit unions under provisions of CRA.” Mica added, “By their nature and mission of ‘people helping people,’ credit unions already meet the financial needs of a broad spectrum of people that fall within their fields of membership, and play an active role in community development and growth. Therefore, credit unions should not be subject to burdensome regulatory requirements when they are already meeting and exceeding the intent behind CRA.”

Inside Washington (03/17/2008)

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* WASHINGTON (3/18/08)--Rep. Keith Ellison (D-Minn.) yesterday joined Reps. Rahm Emanuel (D-Ill.) and Donald Payne (D-N.J.), state-elected officials and housing advocates to tour North Minneapolis areas devastated due to the foreclosure crisis. Following the tour, the delegation was scheduled to meet to discuss legislative and executive responses to the crisis ... * WASHINGTON (3/18/08)--The Treasury Department’s Community Development Financial Institutions (CDFI) Fund has announced the launch of a free e-mail subscription management service. Designed “to keep the community development finance industry, the media and the public informed of news and important updates from the CDFI Fund,” the service is called CDFI Updates. It provides new information on topics ranging from: new press releases and speeches by CDFI Fund officials, to CDFI Fund’s programs, such as the opening of a new program round or an update to a Frequently Ask Questions document. It will also alert subscribers to the release of CDFI Fund publications, among other things…. * ALEXANDRIA, Va. (3/18/08)—The National Credit Union Administration (NCUA) has posted to its website the Frequently Asked Questions (FAQ) that came out of board member Gigi Hyland’s “Key Examination Issues webinar” on Jan. 29. “I appreciate the high level of response and insightful questions asked during the Webinar, which will help credit unions remain informed on the most current safety and soundness issues, including effective risk assessment, planning, and due diligence relating to third-party vendors, which we addressed throughout this online discussion,” stated Hyland in announcing the FAQ’s online availability… * WASHINGTON (3/18/08)--The largest delegation ever from Maine’s credit unions gathered with the state’s congressional delegation for the Maine Credit Union League (MCUL)’s annual breakfast on Capitol Hill March 4. Sens. Olympia Snowe (R) and Susan Collins (R), along with Rep. Michael Michaud (D) and an aide from Rep. Tom Allen (D)’s office attended the breakfast. All recognized Maine credit unions’ commitment to the financial well-being of Maine consumers and applauded the credit unions for being responsible lenders. From left are MCUL President John Murphy and Sen. Susan Collins (R-Maine) during the breakfast. (Photo provided by the Maine Credit Union League) ...

CU push on state data security laws noted

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WASHINGTON (3/17/08)—There is a great divide between the proactive credit union stance and the bankers’ sideline approach to pushing state legislatures for laws to hold merchants accountable if they fail to protect the personal financial information of consumers. An article in the March 14 American Banker noted that bankers are fearful that if they push to put the burden of data breaches on lax merchants, then retail groups might retaliate by pressing on the state level for laws to limit credit card interchange fees. “So credit unions, which mainly serve individuals, have been leading the charge to hold merchants liable if they do not comply with standards that require such things as data encryption,” the article said. “If they fail to safeguard data, then they should bear some of the costs incurred because of that failure,” Chris Johnson, vice president of state governmental affairs at the Credit Union National Association, told the paper. Also noted in the article:
* In Michigan, credit union officials and bankers are “working more closely.” Michigan CU League CEO David Adams said a merchant liability bill introduced there has a “high likelihood of passing” before a Dec. 31 adjournment of the state legislature. * Justin Hupfer, vice president of governmental affairs for the Iowa CU League, said his group is willing to give merchants a chance to voluntarily bolster their security standards and would be willing to table their merchant liability bill. However, Hupfer added, if the merchants don’t make any real progress, the credit unions would push again for codification of standards. * In Wisconsin, credit unions plan to work with retail and banking groups to draft a 2009 version of their bill that would address some of those groups’ concerns, according to Thomas Liebe, vice president of governmental affairs at the Wisconsin CU League. * Also, in Minnesota, which was the first to adopt a merchant liability law when it passed the Plastic Card Security Act in May 2007, Mara Humphrey said the law in her state could cover merchants in other states. Humphrey, who is vice president of governmental affairs for the Minnesota CU League, said the law applies to any merchant doing business in the state. “Our intention was to make the language broad enough so that anyone who does business here would be impacted by this law,” Humphrey said.

HUD unveils new RESPA reform plan

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WASHINGTON (3/17/08)--The Department of Housing and Urban Development (HUD) has released a new Real Estate Settlement Procedures Act (RESPA) overhaul plan to simplify and improve the disclosure requirements for mortgage settlement costs under the law. HUD has worked for years to develop its proposal. The new proposal, which appeared in the March 14 Federal Register is the result of public comment on a 2002 plan, HUD RESPA Reform Roundtables in 2004, congressional hearings, consultation with other federal agencies, and more. HUD says its objective in proposing the revisions is to protect consumers from unnecessarily high settlement costs. The plan includes steps to:
* Improve and standardize the Good Faith Estimate (GFE) form, to make it easier to use for shopping among settlement service providers; * Ensure that page one of the GFE provides a clear summary of the loan terms and total settlement charges so that borrowers will be able to use the GFE to comparison shop among loan originators for a mortgage loan; * Facilitate the borrowers' ability to compare the GFE they get at loan application with the HUD-1/Settlement statement that they get at closing; * Provide more accurate estimates of costs of settlement services shown on the GFE; * Improve disclosure of yield spread premiums to help borrowers understand how they can affect their settlement charges; * Ensure that at settlement borrowers are made aware of final loan terms and settlement costs, by reading and providing a copy of a ``closing script'' to borrowers; * Clarify HUD's current regulations concerning discounts; and expressly state when RESPA permits certain pricing mechanisms that benefit consumers, including average cost pricing and discounts, including volume based discounts.
Comments are due May 13. This RESPA plan does not include an earlier proposal that would have permitted lenders to offer guaranteed mortgage packages, which would give a guaranteed lump sum price for settlement costs, along with a guaranteed rate. The Credit Union National Association (CUNA) participated extensively in the development proves of the HUD proposal and opposed the guaranteed mortgage packages. CUNA submitted two extensive comment letters, in 2002 and then in 2005, and participated in the Reform Roundtables, by HUD’s invitation. However, another major concern CUNA noted with the earlier proposal is that it expands the GFE from one to four pages, which CUNA argued is inconsistent with HUD's goal of simplifying the RESPA disclosures. The GFE in the new proposal is also four pages, so CUNA continues to question whether element of the new plan represents any improvement. HUD has also indicated It intends to seek legislative changes to RESPA to complement these regulatory changes, which includes strengthening certain statutory disclosure requirements and improving remedies for violations.

Government responds in Community First UBIT case

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WASHINGTON (3/17/08)—The federal government filed its response last week in a case in which a state-chartered credit union challenged the Internal Revenue Service’s determinations that certain insurance products offered to members fall outside the credit union's main mission and are subject to unrelated business income tax (UBIT). Community First CU vs. the United States of America was filed by the Appleton, Wisc. credit union on Jan. 15. The credit union is seeking a refund of about $54,000 in taxes paid in 2006 on income from several insurance products. The government response appeared not to refute the underlying details submitted by Community First in its pleadings, but, as expected, denied that Community First is entitled to the tax refund it seeks. The U.S. Attorney’s “answer to complaint” requested that the court deny the relief sought by Community First and asked that the complaint be dismissed. The document further requested the court grant “further relief” to the defendant as the court “deems proper and just, including the costs of this action.” The Credit Union National Association (CUNA), along with the rest of the credit union industry’s UBIT Steering Committee, strongly backs the credit union's action and challenges recent opinions issued by the IRS stating that several insurance and investment products are subject to UBIT. The Steering Committee is comprised of CUNA, CUNA Mutual Group, the National Association of State Credit Union Supervisors, and the American Association of Credit Union Leagues. CUNA strongly believes the activities are consistent with state-chartered credit unions' tax exempt purposes and, therefore, not subject to UBIT. Notably, Community First CEO Cathie Tierney received a standing ovation from her peers at a Wisconsin Credit Union League's annual Governmental Affairs Conference just 10 days after the credit union filed its lawsuit. Credit unions’ support of her action was displayed on an even larger scale when Tierney received an ovation by thousands of credit union representatives attending CUNA’s Governmental Affairs Conference here earlier this month. Tierney, at the time the suit was filed with the U.S. District Court for the Eastern District of Wisconsin Green Bay Division, called the decision to sue the IRS "daunting," but said it was made because her credit union believes "unequivocally that these products are integral to our services to members." Use the resource link below to access a free CUNA Webinar on key issues surrounding UBIT for credit unions.

Inside Washington (03/14/2008)

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* WASHINGTON (3/17/08)--Lawmakers are divided by party lines regarding legislation to fix credit card rules (American Banker March 14). Democrats support a House Financial Services Committee bill by Reps. Barney Frank (D-Mass.) and Carolyn Maloney (D-N.Y.), which would target loose credit card practices, while Republicans want to see if the Federal Reserve Board’s Regulation Z rewrite will work. In the middle of the divide are the conservative Democrats, who do not know whether they should support Frank and Maloney’s bill--which would require improved disclosures and ban universal default. Rep. Mike Castle (R-Del.) said the proposal should not get in the way of the Regulation Z overhaul, while Elizabeth Warren, Harvard Law School professor, said the rules should not be left to regulators because they have not done their job ... * WASHINGTON (3/17/08)--The dismissal of a 2004 lawsuit involving MasterCard and Visa has been upheld in a federal appeals court. A group of merchants charged that the credit card companies and member banks set interchange fees that violate antitrust laws (American Banker March 14). The suit was originally dismissed in July 2005 ... * WASHINGTON (3/17/08)--The Federal Deposit Insurance Corp. (FDIC) voted Friday to maintain the assessment rates charged to insured banks and savings associations for 2008. Most institutions will be charged between 5 and 7 basis points. Expected insured deposit growth is between 3% and 4% in 2008 and 2009 and could reach the board’s objective of 1.25% by the end of this year, the agency said. The National Credit Union Share Insurance Fund did not charge a premium because the credit union fund ended the year at 1.29% ...

A new Lincoln comes to Washington

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WASHINGTON (3/14/08)--The first new five-dollar bill was issued by the Federal Reserve Thursday, a greenback that continued to feature a portrait of the 16th President while incorporating enhanced security features to foil counterfeiting operations. The new currency received quite a symbolic launch here in Washington at President Lincoln's Cottage at the Soldiers' Home, a historic site used by the former president as a White House summer retreat. Officials from the Fed, U.S. Treasury, Bureau of Engraving and Printing and U.S. Secret Service ushered the new $5 bill into circulation at the Lincoln Cottage gift shop. A release accompanying the event noted that Lincoln had established the Secret Service the same evening he was assassinated and made safeguarding the nation's currency from counterfeiters the agency's primary mission. "The redesigned five-dollar bill's enhanced security features help ensure we stay ahead of counterfeiters and protect your hard-earned money," Michael Lambert, assistant director of the Fed’s division of reserve bank operations and payment systems, said. “It only takes a few seconds to check the new $5 bill to make sure it's genuine. If you know how to check its security features, you can easily be confident it's real,” he added. If cash handlers hold the bill to the light, they can check for these features:
* Two watermarks: A large number "5" watermark is located in a blank space to the right of the portrait replacing the previous watermark portrait of President Lincoln found on the older-design $5 bills. A second watermark -- a column of three smaller “5”s -- has been added to the new $5 bill design and is positioned to the left of the portrait; and * A security thread that runs vertically and is now located to the right of the portrait on the redesigned $5 bill. The letters "USA" followed by the number "5" in an alternating pattern are visible along the thread from both sides of the bill. The thread glows blue when held under ultraviolet light.
According to the Fed, in 2007 at total of $61.4 million in counterfeit money was passed in the United States. "Everyone who uses U.S. currency is on the front line of defense against counterfeiters," said Michael Merritt, Deputy Assistant Director, U.S. Secret Service. "The best way to protect yourself is to learn the security features. It’s simple, it’s quick, and it can save you from accepting a fake."

Inside Washington (03/13/2008)

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* WASHINGTON (3/14/08)--The Federal Deposit Insurance Corp. (FDIC) is set to vote today on premium rates, and bankers are waiting to see if the agency will lower the rates as it said it would two years ago--when a law giving the agency power to adjust rates was enacted (American Banker March 13). Some industry observers doubt the FDIC will lower rates. John Douglas, a former FDIC general counsel, said he would be surprised if the rates were cut. Jaret Seiberg, Stanford Group Co. analyst, said the agency will want to be perceived as healthy, so it would likely not defer to banks if failures soon rise ... * WASHINGTON (3/14/08)--Dean Schultz has been named as president/chief executive of the Federal Home Loan Bank (FHLB) of San Francisco, succeeding David Hehman, president/CEO of FHLB Cincinnati (American Banker March 13). Schultz’s appointment ends March 31, 2011 ... * WASHINGTON (3/14/08)--The President’s Working Group on Financial Markets recommends stronger oversight of mortgage lenders, Treasury Secretary Henry Paulson said yesterday (Forbes March 13). The group released a statement with recommendations on how to improve the future state of U.S. and global financial markets, earning the support of Federal Reserve Board Chairman Ben Bernanke. “The recommendations constitute an appropriate and effective response to the deficiencies in our financial framework that contributed to the current turmoil in the financial markets,” Bernanke said. One recommendation would be to improve oversight of mortgage lenders by federal and state regulators, while another would implement licensing standards for mortgage brokers across the U.S. ... * WASHINGTON (3/14/08)--Former Sen. Howard M. Metzenbaum (D-Ohio) died Wednesday at the age of 90 (Associated Press March 13). He was a former union lobbyist and labor lawyer and spent 18 years on Capitol Hill, from 1977 to 1995. After his third term in the Senate, he headed the Consumer Federation of America (CFA), of which the Credit Union National Association was a founding member ...

Short NCUA open board meeting agenda

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ALEXANDRIA, Va. (3/13/08)—The National Credit Union Administration (NCUA) released a one-item agenda for its open board meeting next Thursday. The agency will consider issuing guidance on prohibition orders barring an individual from working with a federally insured credit union. The agenda item reads:
* Proposed Rule: Interpretive Ruling and Policy Statement (IRPS) 08-1, Guidance Regarding Prohibitions Imposed by Section 205(d) of the Federal Credit Union Act.
Under that section of the FCUA, any persons convicted of a crime involving dishonesty or breach of trust is prohibited from working for or with a federally insured credit union.

Rep. Frank debuts economic rescue initiative idea

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WASHINGTON (3/14/08)—House Financial Services Committee Chairman Barney Frank Thursday announced an economic, mortgage and housing “rescue proposal” the Massachusetts Democrats is crafting to stem the rising flow of mortgage foreclosures. Frank outlined the parameters of his proposal, but advised that he is still drafting language of a bill he intends to introduce. He said he will be seeking input and comments regarding the proposal over the next few weeks. The legislation would address increasing mortgage foreclosures by allowing the Federal Housing Administration (FHA) to insure and guarantee refinanced mortgages that have been significantly written down by mortgage holders and lenders. Franks program would permit the FHA to provide perhaps up to $300 billion in new guarantees to help refinance at-risk borrowers into viable mortgages. In exchange for the acceptance of a substantial write-down of principal, the existing lender or mortgage holder would receive a short payment from the proceeds of a new FHA loan if the restructured loan would result in terms that the borrower can reasonably be expected to pay, according to a release from the chairman’s office. The bill is also expected to broach the following areas:
* Eligibility requirements for existing loans; * Requirements for new FHA-insured loans: * Coordination of existing lien-holders; and * Improving FHA capacity, among other things.
“Chairman Frank has indicated that he would like comment and input on this proposal during the March District Work Period, so we are going to take a look at it over the next few weeks," said Ryan Donovan, vice president of legislative affairs for the Credit Union National Association. Use the resource link below to read Frank’s release addressing his plan.

Credit card bills see Hill action

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WASHINGTON (3/14/08)—Legislation to introduce reforms of certain credit card practices has been seeing action this week in both the House and the Senate. On the Senate side, Sen. Robert Menendez (D-N.J.) introduced the Credit Card Reform Act (S. 2753) Wednesday. Menendez is a member of the Senate Banking Committee. His bill is intended to end what Menendez labeled “egregious” practices such as excessive fees, retroactive rate increases, universal default, unilateral changes to credit card agreements, and deceptive credit card offers. In the House, the House Financial Services subcommittee on financial institutions and consumer credit conducted a hearing Thursday on "The Credit Cardholders' Bill of Rights: Providing New Protections for Consumers." That bill was drafted by the subcommittee's chairman, Rep. Carolyn Maloney (D-N.Y.), and has the support of, among others, Rep. Barney Frank (D-Mass.) who heads the full Financial Services Committee. While there are many common areas embraced by the two versions, they are not identical. For instance, the Senate bill includes an opt-in clause which would require card issuers to receive approval from consumers under the age 21 before they could mail credit card solicitations to the young consumers. The House bill does not contain this language. The Credit Union National Association (CUNA) generally supports legislative action that protects consumers from predatory lending practices, but also monitors this type of legislation to ensure that it does not have an unintended consequence which would hamper credit union service to their members. CUNA Vice President of Legislative Affairs Ryan Donovan has noted that, while credit unions are not the target of these bills, the legislation may affect credit card programs that credit unions offer their members. "We're taking a close look at all of these bills. We've discussed these issues with a number of credit unions to try to get a sense of exactly how the bills will affect credit unions," Donovan said. Separately, the Federal Reserve Board is working to update its Regulation Z for credit card disclosures. Fed Chairman Ben Bernanke, in testimony before the House Financial Services Committee last month, said the agency soon would exercise its authority under the Federal Trade Commission Act to write regulations to better protect consumers from unfair and deceptive acts or practices in the credit card industry.

NCUA names Fazio deputy executive director

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ALEXANDRIA, Va. (3/14/08)—The National Credit Union Administration
Larry Fazio during a June 21, 2007 monthly NCUA Board meeting. (Photo provided by CUNA)
(NCUA) has named Larry Fazio to be its deputy executive director, assisting Executive Director Leonard Skiles in managing the daily operation of the agency. Fazio, who has been with the agency for more than 17 years, is currently deputy director of the NCUA’s office of examination and insurance (E&I). In announcing the appointment, NCUA’s Skiles said of Fazio, “(H)e has played a crucial role in helping ensure the safety and soundness of the credit union system. His tireless work on a variety of issues ranging from examinations to capital reform has placed him at the pinnacle of his profession, and I am pleased that he will continue to contribute to the agency in this new capacity.” Fazio began with the NCUA in 1991 as an examiner. He was selected as a supervision analyst in what was then Region IV in 1996 and in 1999 became supervisory examiner in Region IV, a position he held until his selection as director of supervision, also in Region IV. In 2002, Fazio was selected to be the director of risk management in E&I and was then promoted to his current position as deputy director in 2006.

Inside Washington (03/12/2008)

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* WASHINGTON (3/13/08)--Pennsylvania Credit Union Association (PCUA) and Members 1st FCU staff met with Sen. Bob Casey (D-Pa.) to update him on the success of the Credit Union Better Choice Program, a payday lending alternative, during the Credit Union National Association (CUNA) Governmental Affairs Conference last week in Washington, D.C. (Life is a Highway March 7). PCUA staff also met with Rep. Paul Kanjorski (D-Pa.) prior to his address at the conference’s general session ... * WASHINGTON (3/13/08)--Sen. John McCain (R-Ariz.), the Republican presidential candidate, said he is opposed to a government bailout for lenders who were affected by the subprime mortgage market debacle. “It is not the government’s role to bail out investors who should understand that markets are about both return and risk, or lending institutions who didn’t do their job. It’s important that managers and investors are held accountable for their own decisions,” he said in a press release ... * WASHINGTON (3/13/08)--During a hearing Tuesday, Alphonso Jackson, Housing and Urban Development secretary, said he and Rep. Spencer Bachus (R-Ala.) are scheduled to meet with Senate members regarding the finalization of a Federal Housing Administration (FHA) reform bill (American Banker March 12). The Senate’s version of the bill would increase the mortgage limits the FHA could insure by about 15%, while the House version would increase the limits to $729,500 ... * WASHINGTON (3/13/08)--The Federal Deposit Insurance Corp. (FDIC) Advisory Committee on Economic Inclusion will meet March 19 to discuss saving and asset-building opportunities for individuals and banks. The committee will hear from experts addressing asset building for low- and moderate-income individuals, strategies for building assets, and the FDIC’s role in asset building. Last year, Norb Kaczmarek, president/CEO of Erie (Pa.) FCU and Pennsylvania Credit Union Association (PCUA) chairman, presented information about PCUA’s Better Choice Program, a payday lending alternative ... * WASHINGTON ( 3/13/08)--More than 125,000 entrepreneurs interested in starting or expanding a business have used the Small Business Administration’s (SBA’s) new online assessment resources in just three months, the SBA announced Wednesday. The Small Business Readiness assessment tool is intended to help interested individuals evaluate their readiness for starting a small business. Based on their scores, entrepreneurs are then directed to the SBA training resources that support identified needs to improve business preparedness…

CUNA urges relief for reg burden

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WASHINGTON (3/13/08)—The Credit Union National Association (CUNA) made its case against burdensome credit union regulations before the Small Business Administration’s (SBA’s) second national forum on regulatory fairness. The SBA hearing is intended to promote discussion on excessive regulation or enforcement by any federal agency that affects the country’s small businesses. Mary Dunn, CUNA senior vice president and deputy general counsel, in her testimony, underscored the "staggering regulatory burden" on credit unions. “Credit unions are one of the most heavily regulated entities and are currently subject to a wide range of regulatory requirements, including an array of consumer protection rules on issues such as truth-in-lending, privacy, the fair and accurate credit transactions act, and a number of others, as well as safety and soundness rules. "Because credit unions are member owned and want to avoid predatory practices, CUNA supports reasonable protections for consumers. However, new laws translate into regulatory requirements and as a result, the burdens imposed on credit unions today are staggering and costly,” Dunn said. She noted that excessive regulation not only proposes a compliance burden, but also diverts credit unions from their mission of providing financial services to their members. Dunn also pointed out that credit unions are subject to more restrictive capital requirements than those that apply to other types of financial institutions, field-of-membership and member-business-lending restrictions, as well as a usury ceiling, limitations on loan maturities, and stringent limitations on their investment options. The CUNA testimony reiterated the need for prompt corrective action reform to provide a more risk-based system for credit unions and the importance of allowing credit unions to offer more small business loans to their members. Both regulatory improvements are addressed within the language of the Credit Union Regulatory Improvements Act (H.R. 1537), and are expected to be included in a Senate version of the bill whose introduction is said to be imminent. Dunn also addressed CUNA’s recommended improvements in the SBA's processing of applications and backed H.R. 1849, a bill pending in the House that would facilitate SBA lending by credit union.

CU-backed candidate wins House seat

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WASHINGTON (3/13/08)—A credit union-backed candidate has made a successful bid to win an Indiana seat in the House vacated by the death of his grandmother, the late U.S. Rep. Julia Carson. Furthermore, House Financial Services Committee Chairman Barney Frank (D-Mass.) has said that the newly elected Democrat Andre Carson may likely fill his grandmother’s place on that panel. (Roll Call Feb. 14) Carson won a special election Tuesday that enables him to fill the seat for the remaining 10 months of the elder Carson’s term. (Indianapolis Star March 12) The younger Carson won 54% to 43% over Republican state Rep. Jon Elrod. To win a full term, he will have to win a May primary election and the November general election. CUNA’s Credit Union Legislative Action Council and the Indiana Credit Union League supported Carson with the maximum allowed $5,000 donation, according to Hawkins.

Inside Washington (03/11/2008)

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* WASHINGTON (3/12/08)--The Federal Deposit Insurance Corp. is scheduled to meet Friday to set premium rates for 2008 (American Banker March 11). The agency also could discuss a proposal on how rebates would be distributed back to the financial services industry if the Deposit Insurance Fund’s ratio rises above 1.35% ... * WASHINGTON (3/12/08)--The Federal Deposit Insurance Corp.'s summary of deposits information is now available. The information includes deposit data from more than 89,000 agency-insured financial institutions ... * WASHINGTON (3/12/08)--The World Economic Forum Tuesday recognized Rodney E. Hood, National Credit Union Administration (NCUA) vice chairman, as a Young Global Leader 2008. The honor acknowledges the top 200-300 young leaders worldwide for their professional accomplishments, commitment to society and potential to contribute to the world’s future. This year’s leaders were chosen from a pool of 5,000 candidates. Hood was appointed by President George W. Bush to sit on the NCUA board and was elected vice chairman in 2005 ... * WASHINGTON (3/12/08)--Forty staff members and volunteers from 12 Missouri credit unions met with lawmakers during the Credit Union National Association’s Governmental Affairs Conference last week in Washington, D.C. (Legislative Updates March 7). Missouri credit union representatives met with House Minority Whip Roy Blunt (R-Mo.) before he addressed the conference March 5. They also hosted a breakfast that day and met with federal legislators in their Capitol Hill offices. From left are: Gary Mason, Postal Federal Community CU; Ralph Tate, Postal Federal Community CU; Rosie Holub, Missouri Credit Union Association CEO; Blunt; Bob Oldt, Howard House and Steve Pierson, all from Postal Federal Community CU. (Photo provided by the Missouri Credit Union Association) ...

NCUA officials reveal 08 exam priorities

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WASHINGTON (3/12/08)—Key National Credit Union Administration (NCUA) officials detailed the agency’s 2008 examination issues last week, stating generally that credit unions are in good shape despite experiencing increasing pressure on liquidity. Five NCUA representatives discussed “Hot CU Exam Topics for ‘08” for a credit union audience gathered for a break-out session during the Credit Union National Association’s (CUNA’s) Governmental Affairs Conference held here. The session spanned topics from loan delinquencies, member business lending issues, third-party vendor relationships, and 5300 call reports. The panel, led by Joy Lee, NCUA's director of supervision, starting by noting increasing pressure on liquidity as the loan-to-share ratio has risen at federally insured credit unions to almost 84%. Matthew Biliouris, program officer in NCUA's office of examination and insurance, said, however, that while the overall delinquency rate is rising, it remains at less than 1% of total loans. He said that the agency is watching in particular the increased delinquencies in member business loans (MBL) and loan participations, and is monitoring real estate loans. Margaret Ross, NCUA's new member business lending program officer, elaborated on the agency's concerns about MBL and loan participation programs. She cited among those concerns:
* Inadequate cash flow analysis; * Incomplete loan write-ups; * Lack of understanding the business risk; and * Lack of understanding of concentration risk.
Dominick Nigro, an NCUA information systems officer, reviewed the agnecy’s recent supervisory letter on evaluating third party relationships, and outlined the elements of an effective due diligence program. Amber Littleton, a risk management officer at NCUA, announced a plan to move to an online 5300 call report om 2009 and an online filing of the annual report of officials form. The online call report, she said, will enable multiple people to input information simultaneously and allow the credit union to correct prior period call reports. In addition, there will be a "credit union online profile," which will include information that the credit union has to file with NCUA, but which changes infrequently, such as branch information. Littleton said benefits of this change include: Multiple access from credit union computers; elimination of mailing and printing delays; and self-management of information changes. The 5300 software will be eliminated, but provision will be made for small credit unions still operating manually. Use the resource link below to access the panel's PowerPoint presentation.

Inside Washington (03/10/2008)

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* WASHINGTON (3/11/08)—A free webinar on key issues surrounding unrelated business income tax (UBIT) for credit unions is now available online. The Credit Union National Association (CUNA) offered the UBIT webinar live during the March 3-6 Governmental Affairs conference here. Featured panelists are: Mary Martha Fortney, president/CEO, NASCUS; Faye Patzner, chief legal officer, CUNA Mutual Group CUNA General Cunsel Eric Richard, and Brett Thompson, president, Wisconsin CU League. n January, Community First CU, Appleton, Wis., filed a court challenge against the Internal Revenue Service regarding its UBIT determination on insurance products… * WASHINGTON (3/11/08)--Guy Hood, right, president/CEO of the Florida Credit Union League and a director on the board of the Credit Union House in Washington, D.C., was inducted into the CU House Hall of Leaders March 3. Congratulating him here is Dan Mica, Credit Union National Association president/CEO. The Hall of Leaders was created by Credit Union House to provide lasting recognition for individuals who have demonstrated an outstanding commitment to credit unions and who have made a significant impact on the credit union movement at the local, state, or national level. Hood was the first inducted. (Photo provided by the Florida Credit Union League) ... * WASHINGTON (3/11/08)--The Maryland and District of Columbia congressional delegation spoke to 80 credit union officials at the Maryland and District of Columbia Credit Union Association Congressional Luncheon on Capitol Hill Wednesday (Focus Newsletter March 10). Sen. Ben Cardin (D-Md.), pictured, voiced his support for credit unions, encouraging them to continue helping their members. Rep. Roscoe Bartlett (R-Md.) discussed his support for credit union regulatory reform legislation. Rep. C.A. Ruppersberger (D-Md.) said he was glad to be the first co-sponsor of the Credit Union Regulatory Improvements Act from the Maryland delegation, and Rep. Elijah Cummings (D-Md.) noted credit unions are a bridge to help those cross over financial difficulties to meet goals and attain wealth. (Photo provided by the Maryland and District of Columbia Credit Union Association) ... * WASHINGTON (3/11/08)--A Friday hearing where lawmakers expected to grill executives who profited off three companies hurt by the subprime mortgage market crisis did not go as expected (American Banker March 10). The executives, E. Stanley O’Neal, Merrill Lynch and Co.; Charles O. Prince, Citigroup; and Angelo Mozilo, Countrywide Financial Corp., did not apologize for their companies--.instead, they defended themselves. Mozilo took responsibility for the downfall and empathized with those who cannot afford their mortgages. He also said he would provide company employees to Rep. Elijah Cummings’ (D-Md.) staff to solve foreclosure problems ... * WASHINGTON (3/11/08)--Housing and Urban Development (HUD) Secretary Alphonso Jackson will testify before the House Financial Services Committee today and the Senate Banking Committee Wednesday to discuss oversight of HUD, as well as the department’s budget request for fiscal year 2009. He is slated to be the sole witness before the House panel, but is scheduled to precede these witnesses on the Senate side: Michael Kelly, executive director, District of Columbia Housing Authority; Hector Pinero Sr., representing the National Multi-Housing Council and the National Leased Housing Association; Diane Randall, director, Partnership for Strong Communities; Edgar Olsen, economics professor, University of Virginia; and Barbara Sard, director of housing policy, Center on Budget and Policy Priorities …

Compliance T or Frefunded ATM fees are interest

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WASHINGTON (3/11/08)—If a credit union decides to refund foreign ATM fees to its members, does it have to treat the refund as interest and file a Internal Revenue Service (IRS) Form 1099 INT? The Credit Union National Association compliance team advises that any credit union considering such a refund program should look closely at the issue. “According to the IRS Information Return Hotline, the IRS has not issued anything on this particular issue and would prefer to determine if filing is appropriate on a case by case basis,” according to CUNA’s Compliance Challenge. The IRS requires the filing of a 1099 INT for any interest payments made to a consumer in relation to a deposit account, whether or not it is designated as interest, when it provides an incentive for the consumer to open or maintain a deposit account with a particular institution. “Interest” has been found to mean actual interest accrued on an account and monetary gifts or merchandise provided to consumers in connection with opening or maintaining an account with a particular institution. “So, it could be argued that ATM fee refunds offered as an incentive to keep existing members or solicit new members could be considered interest,” the Challenge says. For those considering a refund program, or other initiatives that bring up tax concerns, here’s the IRS Information Return Reporting Hotline: 1-866-455-7438.

NCUA guidance on sole proprietorship CTRs

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ALEXANDRIA, Va. (3/11/08)—The National Credit Union Administration (NCUA) recently offered currency transaction report (CTR) guidance on filing obligations incurred when a credit union reports transactions involving sole proprietorships and legal entities operating under a “doing business as” (DBA) name. The NCUA Letter No. 08-CU-03 is a follow up to a Financial Crimes Enforcement Network (FinCEN) clarification on the same topic. The FinCEN administrative ruling FIN-2008-R001 replaced a previous ruling, FIN-2006-R003. According to the NCUA letter, FinCEN defines a sole proprietorship as a business in which one person owns all the assets and owes all the liabilities. “When filing a CTR involving a sole proprietorship, credit unions are required to complete one section ‘A’, containing the owner’s name, social security number, home address, date of birth and occupation, as well as the DBA name,” the NCUA letter noted. It added that only one section ‘A’ is required, even if the business operations have a different address and tax identification number than its owner. The letter further stated that the FinCEN ruling also applies to CTRs filed on legal entities operating under a DBA name. “Credit unions are required to complete one section ‘A’ containing the entity’s name, Employer Identification Number (EIN), address and business activity, as well as the DBA name,” the letter said.

CUs staggering burden will be forum topic

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WASHINGTON (3/11/08)—The Credit Union National Association (CUNA) will underscore the “staggering regulatory burden” on credit unions at the second national forum on regulatory fairness sponsored by the Small Business Administration (SBA) Wednesday. Mary Dunn, CUNA senior vice president and deputy general counsel, said she will note in oral and written testimony the following arguments:
* Credit unions are subject to the same consumer protection laws and regulations as other financial institutions, similar safety and soundness requirements, and are subject to the increasing requirements of the Bank Secrecy Act. * In addition, credit unions are subject to more restrictive capital requirements than those that apply to other types of financial institutions, field-of-membership and member-business-lending restrictions, as well as a usury ceiling, limitations on loan maturities, and stringent limitations on their investment options.
CUNA will also delineate the need for prompt corrective action reform to provide a more risk-based system for credit unions and the importance of allowing credit unions to offer more small business loans to their members. Both regulatory improvements are addressed within the language of the Credit Union Regulatory Improvements Act (H.R. 1537), and are expected to be included in a Senate version of the bill whose introduction is said to be imminent. CUNA will also address improvements in the SBA's processing of applications. In February, CUNA President/CEO Dan Mica and SBA Administrator Steve Preston met to discuss credit union participation in SBA lending. The meeting marked the five-year anniversary of when the agency expanded its guaranteed loan program to all credit unions, regardless of charter. Currently, more than 385 credit unions participate in the SBA 7(a) program, yet they accounted for only about 1% of such lending in 2007. Mica praised the SBA for improved paperwork processes, but said the agency should continue to improve efforts at speeding applications, a point Preston acknowledge and pledged to improve. SBA National Ombudsman Nicholas Owens said in a release that last year’s regulatory fairness hearing was “a great success, as groups explained the challenges their small business members face when trying to comply with regulations within their respective industries.” He added, “We would like to build upon last year’s hearing, and continue to successfully identify those federal regulatory enforcement actions that are excessive — rather than effective — for small businesses across the nation.”

GAC closes CURIA backers increase

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WASHINGTON (3/10/08)—Reps. Joe Wilson (R-S.C.) and Bill Pascrell (D-N.J.) added their official support to the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537) just as the four-day Credit Union National Association Governmental Affairs Conference—complete with grassroots Hill visits--ended. The addition of the two names brings the total of official CURIA supporters in the House to 147. Credit union representatives from both South Carolina and New Jersey were among the hundreds flooding Capitol Hill to garner support for CURIA and other credit union issues. Also, it was at the CUNA GAC that Sen. Mary Landrieu unveiled her plan to introduce a Senate version or CURIA. The general visibility of the cornerstone credit union legislation was acutely heightened last week, between Landrieu’s announcement, the credit union Hill visits, and a comprehensive House Financial Services Committee hearing on credit union regulatory relief issues, which highlighted CURIA. Use the resource link below for CURIA details and a full list of co-sponsors.

Inside Washington (03/07/2008)

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* ALEXANDRIA, Va. (3/10/08)--The National Credit Union Administration’s Office of Small Credit Union Initiatives (OSCUI) joined other federal agency representatives last week to discuss financial education needs in African-American communities. The roundtable was the third in a series of four discussions held as part of the Financial Literacy and Education Commission's implementation of the National Strategy for Financial Literacy. Adrienne Munroe, of OSCUI, summarized NCUA's financial education programs, stressing that both NCUA and credit unions have historically been dedicated to bringing financial services to those with limited access to the financial mainstream… *WASHINGTON (3/10/08)—In a report to the Federal Deposit Insurance Corp.'s (FDIC) board of directors, the agency’s inspector general urged that a bank's commercial real estate (CRE) risk should be noted more prominently in exams. The inspector general said the FDIC should require more examination reports to include a specific page showing the level of CRE loan concentrations. The inspector general said the FDIC should require a specific page on the level of CRE loan concentrations in more examination reports (American Banker March 7)…

House bill would address interchange fees

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WASHINGTON (3/10/08)—A bill on credit card interchange fees was introduced in the House last week. H.R. 5546 is intended to ensure competitive market-based rates and terms for merchant’s access to electronic payment systems by enabling merchants to negotiate on fees with card companies. The bill was introduced by Rep. John Conyers (D-Mich.), who is chairman of the House Judiciary Committee, and is called the “Credit Card Fair Fee Act of 2008.” At issue are the fees charged merchants by credit card companies each time a consumer uses the card for a purchase. In a release, Conyers said the fees increased 117% between 2001 and 2006 and an additional 17% between 2006 and 2007. The fees amounted to $42 billion in that one-year period. Some proponents of legislation argue that the regulation of such fees in other parts of the world have produced lower fees for merchants and have prevented further escalation of fees. Some argue that it is unfair to merchants—and ultimately their customers-- to pay what they say amounts to a hidden revenue stream to the credit card issuers. However, others counter the pro-regulation arguments saying that the free market should set the interchange fees, not the government. They credit interchange fees with assisting the growth of universal acceptance of cards and the innovation of super-fast authorization technology and enhanced security measures. ”This legislation is intended to give merchants a seat at the table in the determination of these fees,” he said. “The bill creates a limited antitrust immunity for negotiating voluntary agreements and, if necessary, participating in the market-based proceedings.” These market-based proceedings will determine the exclusive rates and terms merchants must pay for a three year term. No other fees, terms or conditions may be imposed on the merchants. Under the bill, the rates and terms would be determined by Electronic Payment System Judges, to be appointed by the Department of Justice Antitrust Division and the Federal Trade Commission. The Credit Union National Association and its payments subcommittee are currently reviewing the 45-page bill to determine the extent of its impact on credit unions.

Hearing coming on credit card bill

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WASHINGTON (3/10/08)--The House Financial Services subcommittee on financial institutions and consumer credit announced Friday it will conduct a March 13 hearing on “The Credit Cardholders’ Bill of Rights: Providing New Protections for Consumers.” The bill was drafted by the subcommittee’s chairman, Rep. Carolyn Maloney (D-N.Y.), after a series of hearings and a roundtable forum discussion with credit card issuers, consumer groups, House Financial Services Chairman Barney Frank (D-Mass.), and Rep. Mike Castle (R-Del.) to discuss potential credit card reforms. The announcement noted the subcommittee will hear from witnesses representing consumers, legal and economic experts, and credit card industry.

CUNA urges Senate support for CURIA

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WASHINGTON (3/10/08)—The Senate can help credit unions continue their mission of serving working families, making needed services available to lower-income or underserved consumers, as well as help promote economic growth, by backing a Senate version of the Credit Union Regulatory Improvements Act (CURIA), the Credit Union National Association (CUNA) said in a letter to every U.S. Senator. At the CUNA Governmental Affairs Conference in Washington last week, Sen. Mary Landrieu announced she will introduce CURIA in the Senate. Her bill is expected to be identical to that introduced by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) in the House last March. That bill has a total of 145 official backers in the House, and more are expected to sign on soon, after credit union efforts to garner additional support during Capitol Hill visits made in conjunction with the CUNA GAC. Sen. Joseph Lieberman (I-Conn.) also used the GAC as his venue for announcing he will sign onto the bill as an original co-sponsor. CUNA President/CEO Dan Mica urged Senate support of the bill to “enable credit unions to serve the best interests of their members.” “Specifically, CURIA will modernize credit union capital standards to permit more efficient capital management while allowing more earnings to be returned to members in lower costs and expanded services. It will expand the ability of credit unions to make loans to finance their members’ local small businesses. “It will permit more credit unions to offer needed services in lower-income communities that are not adequately served by other depository institutions. And it will improve the quality of services to credit union members by updating or removing burdensome regulations,” Mica noted in the March 6 letter. Mica added that CUNA looks forward to working with the senators and their staffs “on this and other important legislation.”

Inside Washington (03/06/2008)

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* WASHINGTON (3/7/08)—House Financial Services Committee Chairman Barney Frank (D-Mass.) is planning to introduce a second economic stimulus package that would attempt to steady the troubled credit and housing markets. One challenge posed by the bill would be whether or not the lending industry is willing to cooperate (American Banker March 6). When questioned if he was planning to ask lenders to take a “haircut” on mortgages in trouble, Frank replied that a lobotomy was in order instead. Under Frank’s proposal, the government could buy mortgages written down by lenders, which appears to contradict any prior notions of a bailout. President George W. Bush has already stated his opposition to a lender bailout … * WASHINGTON (3/7/08)—Federal Deposit Insurance Corp. Chairman Sheila Bair is urging Congress to move forward on legislation that would forbid commercial ownership of industrial loan companies (ILCs). A moratorium on ILCs expired in January, leaving the agency without guidelines on how to tackle pending ILC applications. A bill that would restrict commercial ILC ownership is currently stalled in the Senate … * WASHINGTON (3/7/08)—The Federal Home Loan Bank (FHLB) of Chicago values itself at $800 million, and if the FHLB Dallas accepts that, a merger proposal could be created within a couple of weeks. The merger must be approved by the Federal Housing Finance Board, and FHLB Chicago’s value could change, depending on the markets. A spokesman for Chicago FHLB said terms still need to be finalized … * WASHINGTON (3/7/08)—The Office of Federal Housing Enterprise Oversight (OFHEO) yesterday released the maximum conforming loan limits that will be in effect throughout 2008 as a result of the Economic Stimulus Act of 2008. The maximum for temporary jumbo conforming loan limits, which apply to loans originated in the period between July 1, 2007 and Dec. 31, 2008, are as high as $729,750 for one-unit homes in the U.S. …

Senate Finance chair recognizes CU efforts

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WASHINGTON (3/7/08)--Credit unions know that there’s no place like home, and they also know that without homes there is no community—which is why they work to keep members in their homes, according to Sen. Max Baucus (D-Mont.), another Governmental Affairs Conference (GAC) closing session speaker. Baucus touched on the problems triggered by the subprime loan debacle, highlighting credit unions’ community investment. In addition to creating affordable loans, credit unions help by providing financial education and free income tax assistance, Baucus said. “Credit unions are helping the next generation be wise with money,” he said. The senator encouraged credit unions to take advantage of the opportunities and continue helping. Credit unions have played a large role in Montana and nationwide by making loans that are not predatory, he added. “Credit unions are the foundation of the community,” he said. “They can demonstrate the benefits of cooperative lending.” The GAC was presented in Washington by the Credit Union National Association this week.

Royce CUNA one of most effective organizations

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WASHINGTON (3/7/08)—Just a day after representatives from at least 18 state credit union leagues hiked Capitol Hill to share the credit union message, Rep. Ed Royce (R-Calif.) called the Credit Union National Association (CUNA) one of the “most effective organizations” he’s ever seen on the hill. Royce, who introduced the Credit Union Regulatory Relief Act (CURRA, H.R. 5519) with Rep. Paul Kanjorski (D-Pa.) Monday, was one of three members of Congress who spoke during yesterday’s CUNA Governmental Affairs Conference (GAC) closing session. Royce reminded credit unions of the importance of the Credit Union Regulatory Improvements Act (CURIA), saying he intends to get that bill passed. Royce pledged to his credit union audience that “we’re going to continue efforts until the job is done.” He added, “I want to remind people that we don’t want the government to be an obstacle of economic growth.” The impact of credit unions is great—they pool resources that create liquidity, Royce said, noting that he has seen how credit unions in third-world countries have helped build a stable and safe financial system.

CU reg relief issues get full hearing in House

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Click for slide show (CLICK TO VIEW PHOTO ESSAY) “By law--not regulation, as for other insured depositories--credit unions must maintain a 7% net worth or leverage ratio in order to be considered ‘well capitalized,’” Dorety told the committee. “In comparison, the current leverage ratio for banks to be well capitalized is only 5%. This capital requirement for credit unions is inefficient in that it unnecessarily retards member service and growth, and it does not appropriately account for risk of a credit union’s assets.” The CUNA chairman said Congress should consider the removal of all of the prompt corrective action (PCA) stipulations from the statute and “leave it to regulatory determination, similar to the system under which the banking industry operates.” (Photo provided by CUNA)
WASHINGTON (3/7/08)—It could be argued that the star of Thursday’s congressional hearing on credit union regulatory relief was the important role credit unions are playing to help communities through the “subprime mortgage meltdown,” even though they were not part of the problem. That role was highlighted by a number of the members of the House Financial Services Committee—including Chairman Barney Frank (D-Mass.)—during that panel’s hearing entitled "The Need for Credit Union Regulatory Relief and Improvement." Frank, in his remarks opening the hearing, said he hoped his colleagues would follow their debate about the regulatory relief issues with some definite action for credit unions. He thanked Rep. Paul Kanjorski (D-Pa.), who heads the panel’s subcommittee on capital markets, for his role in spearheading credit union regulatory relief efforts. Kanjorski, along with Rep. Ed Royce (R-Calif.), is author of the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537), which has 145 backers in the House, and the very recently introduced Credit Union Regulatory Relief Act (CURRA, H.R. 5519). Kanjorski chaired the remainder of the hearing at the chairman’s request. National Credit Union Administration (NCUA) Chairman JoAnn Johnson was the first of four credit union movement witnesses to testify. She keyed primarily into two major issues; reforming prompt corrective action (PCA) rules and allowing all credit union charter types to offer services to underserved areas. Johnson said the legislation being discussed by the committee would allow Congress to grant greater flexibility to credit unions serving consumers and to strengthen the NCUA’s ability to maximize the safe and sound operation of federally chartered credit unions. Honing in on PCA reform as her top priority as a regulator and a “necessary tool,” Johnson said a risk-based capital system, more aligned with that of the banking and thrift industries, would improve the current credit union “regulatory regime” and “put more money in the members’ hands.” CURIA proposes such a system. She added that it would: promote more active management of risk by credit unions in relation to capital levels; enable credit unions to better relate their capital to risk assessment; and strengthen NCUA oversight by adding tools to identify each credit union’s risk profile based on their activities. Tom Dorety, CEO of Suncoast Schools FCU, Tampa, Fla., testified on behalf of the Credit Union National Association (CUNA) as its new chairman. He told the House committee members he finds it truly ironic that as the economy experiences a credit crunch in many sectors and credit unions stand “ready, willing and able to help alleviate the problem and promote economic growth,” credit union efforts to do so are inhibited by “outmoded laws that protect the narrow self interest of bankers.” He urged Congress to support legislation that would improve a current 12.25%-of-assets cap on member business lending (MBL) by raising it to 20% of assets. “There is no economic rationale for this cap,” Dorety said, noting credit unions have been providing such loans safely for more than 100 years. Also, CUNA urged lawmakers to exempt from the cap MBLs made in underserved areas. The CUNA witness also backed the NCUA’s plan for a risk-based capital system and the statutory clarification that all federal credit unions may apply to NCUA to add underserved areas to their fields of membership. “We are forced to ask Congress for this provision because the American Bankers Association (ABA) sued NCUA in 2005 for authorizing single-sponsor and community-chartered credit unions to add underserved areas to their field of membership.” In a juxtaposition of banker actions that Rep. Brad Sherman (D-Calif.) said defined the term “chutzpah,” Dorety reminded the committee that in November 2005 the ABA complained before the House Ways and Means Committee that credit unions do not do enough to serve people of modest means. Then, within days, it took credit unions to court to prevent them from doing so. Also testifying as part of the credit union panel at the hearing were the National Association of State CU Supervisors, the National Association of Federal Credit Unions and two banking industry representatives. On a separate bankers’ panel, the ABA and Independent Community Bankers of America were represented. In a related story, earlier this week Sen. Mary Landrieu (D-La.) told the more than 4,500 attendees of CUNA’s Governmental Affairs Conference here that she soon will introduce a Senate version of the CURIA bill. Sen. Joe Lieberman (I-Conn.), also addressing the GAC, vowed to be an original co-sponsor of the measure.

Lieberman CUs represent classic American ideal

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WASHINGTON (3/7/08)—Sen. Joe Lieberman (I-Conn.) reiterated his pledge to credit
Click to view larger image U.S. Sen. Joe Lieberman (I-Conn.), left, and CUNA President/CEO Dan Mica backstage before Lieberman addressed Thursday's GAC closing general session. (Photo provided by Robert Knudsen)
unions that he would fight any attempt to take away the tax-exempt status of credit unions and said credit unions’ cooperative model represents a classic American ideal of “people getting together.” Addressing the closing session of the Credit Union National Association’s Governmental Affairs Conference, Lieberman said that America is a “remarkably diverse” country and that credit unions represent the “length, the depth and the breadth of our country.” “Unity, confidence, optimism—working for the common purpose—is what you represent.” Lieberman said he recognized the importance of the Credit Union Regulatory Improvements Act to credit unions and pledged to be an original co-sponsor of a bill that Sen. Mary Landrieu (D-La.) plans to introduce in the Senate.

CURIA bill will get Senate version

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Click for slide show (CLICK TO VIEW SLIDESHOW) CUNA President/CEO Dan Mica (left) and more than 4,000 credit union attendees exalt U.S. Sen. Mary Landrieu (D-La.) after the senator said she and U.S. Sen. Joe Lieberman (I-Conn.) would introduce a Senate bill identical to the Credit Union Regulatory Improvements Act (H.R. 1537), currently making its way through the House. The announcement came during Wednesday’s GAC general session in Washington, D.C. “Credit unions reach people where they are and get them to where they need to be,” said Landrieu. “Sen. Lieberman and I will do the best we can to move this bill in Congress on your behalf” and on behalf of the people credit unions serve, she concluded. (Photo provided by CUNA)
WASHINGTON (3/6/08)--Credit union attendees of the Credit Union National Association (CUNA) Governmental Affairs Conference responded with a raucous standing ovation yesterday to Senator Mary Landrieu’s (D-La.) news that she will introduce a Senate version of the Credit Union Regulatory Improvements Act. Sen. Joe Lieberman (I-Conn.) will co-sponsor the credit union bill, which is identical to the House bill, CURIA, H.R. 1537. CUNA President/CEO Dan Mica praised the action. The bill could be introduced as early as today. “Our sincere thanks to Sen. Mary Landrieu for introducing credit union regulatory improvement legislation in the Senate. Our gratitude also to Sen. Joe Lieberman for co-sponsoring,” said the CUNA leader. “This is a significant development for credit unions, as this bill is identical to a measure in the House--which has earned the support of 145 members, and continues to add co-sponsors,” said Mica. Mica said he looks forward to working with Landrieu, Lieberman and other senators in “building similar backing for this bill in the Senate in the weeks to come.”

Watch CU hearing Thursday live on the web

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WASHINGTON (3/6/08)--Today's hearing on the need for credit union regulatory relief and improvement in the House Financial Services Committee will be streamed on the Web, live, and available for all to see at no charge. The committee hearing, chaired by Rep. Barney Frank (D-Mass.) is scheduled for 10 a.m. EST Thursday. According to the committee’s announcement, the hearing will “provide a comprehensive examination of the need for regulatory relief among credit unions, including the Credit Union Regulatory Improvements Act, as well as many other issues within the industry.” To view the hearing on the web tomorrow, add the link to the “favorites” folder in your web browser: (see Resource Link). On Thursday, click on the link, then click on the box that states “Click here to watch live broadcast of this hearing,” and follow the brief instructions that result.

Johnson says transparency is cornerstone of tenure

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Washington (3/6/08)—Addressing her seventh and perhaps final Governmental Affairs Conference Wednesday, National Credit Union Administration (NCUA) JoAnn Johnson said the word “transparency” captures the spirit of her six years of work as federal regulator. “Transparency means to let the sunshine in,” where credit union members’ rights are at stake, she told the audience at the Credit Union National Association conference here. Transparency is the “best vehicle” to assure members have necessary information to make informed decisions about their ownership rights, she said. Johnson reiterated her position that her agency is not in the business of “dictating management decisions for credit unions,” but rather “to ensure decisions are made with members’ best interests at heart.” The NCUA chairman, whose term ended in August but who has pledged to stay, if possible, until her successor is in place, encouraged credit unions to comment on a recent advance notice of a proposed rulemaking (ANPR) on the accuracy of communication to members, integrity of member voting and fiduciary obligation of senior executives. She said she considers that ANPR issued in January to be perhaps the most important issued during her tenure. It considers amending agency rules to more clearly define a credit union board's fiduciary duties in the face of major decisions, such as mergers or conversions to mutual thrifts. The NCUA announced last week it has extended the comment period to April 30 from March 31 as it considers amending its rules on credit union board's fiduciary duties. “Please give the ANPR your thoughtful consideration and let us hear from you on this proposal regarding mergers, credit union charter conversions and insurance termination transactions. “While the transparency issue can be complex, a member-centric answer is deceptively simple and one the credit union industry should be eager to embrace,” Johnson said. The White House in December nominated Michael E. Fryzel, an Illinois real estate lawyer and former director of the state's Department of Financial Institutions, to succeed Chairman Johnson on the NCUA board. However, his name is among the many delayed appointment nominees awaiting confirmation action from the Senate. Early in February, President George W. Bush called on the Senate to start immediate work on its confirmation process for a long list of pending nominations, including Fryzel and three nominees to the Federal Reserve Board.

Inside Washington (03/05/2008)

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* WASHINGTON (3/6/08)—House Financial Services Committee Chairman Barney Frank (D-Mass.) is pushing a draft bill that would protect servicers from lawsuits if they choose to modify a borrower’s mortgage to prevent foreclosure. The protection would be applicable to loan workouts for up to five years unless the borrowers refinances or sells. The borrower would not be subject to other fees or points … * WASHINGTON (3/6/08)—Regulators signaled that they could be open to a Democratic contingency plan to help with the housing crisis, but could not confirm whether they will actually need it (American Banker March 5). Federal Deposit Insurance Corp. Chairman Sheila Bair recognized that the industry should be open to all options, but warned that a government intervention could risk a moral hazard. Comptroller of the Currency John Dugan disagreed, stating that the government may not need to intervene. Federal Reserve Board Vice Chairman Donald Kohn and Office of Thrift Supervision Director John Reich said adding onto existing programs would be better than making new ones … * WASHINGTON (3/6/08)—Interagency guidelines for remote deposit service could be released by federal regulators in a few months, triggering concern from bankers who worry that the oversight could create a chilling effect on the technology that has helped many community financial institutions bring in customers outside of their local areas (American Banker March 5). A survey conducted by the American Bankers Association (ABA) Banking Journal indicated that 37.5% provide remote deposit. ABA’s Douglas Johnson, who is vice president of risk management policy, said it’s uncertain that the guidance would slow remote deposit growth and said financial institutions should be able to live with the guidance … * WASHINGTON (3/6/08)—U.S. Treasury Assistant for Economic Policy Phillip Swagel will hold a media briefing today on the state of the U.S. economy. The event is open to the media …

House CU reg relief hearing today

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WASHINGTON (3/6/08)—Today, as more than 4,500 credit union representatives attend the Credit Union National Association’s (CUNA) Governmental Affairs Conference (GAC) here, the House Financial Services Committee will launch a comprehensive look at credit union regulatory relief issues. In a hearing entitled “The Need for Credit Union Regulatory Relief and Improvement,” CUNA Chairman Tom Dorety, CEO of Suncoast Schools FCU, Tampa, Fla., will testify. Other groups expected on the witness panels include the National Credit Union Administration, the National Association of State CU Supervisors, the National Association of Federal Credit Unions and two banking industry representatives. NCUA’s Johnson, speaking at the GAC Wednesday, said her testimony will key in on two major issues. She said she will address the importance of creating a risk-based capital system for credit unions by reforming prompt corrective action (PCA) rules. Also, she will make her case for allowing all credit union charter types to offer services to underserved areas. Major discussion is expected to be devoted to those and other provisions of the Credit Union Regulatory Improvements Act, H.R. 1537, introduced by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.). CURIA, among other things, also proposes to increase the member business lending cap to 20%, up from 12.25%, of a credit union’s assets. Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) introduced a new credit union bill Monday, one which would offer regulatory relief in 12 areas but does not go as far as the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). Also expected to testify at the hearing are representatives from the American Bankers Association and the Independent Community Bankers of American. Today’s hearing, at 10 a.m. ET, will be streamed live on the Web. Use the resource link below. Click on the orange box that says "Click here to watch live webcast of this hearing."

CU reps meet with Hill leaders

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Click for slide show House Speaker Nancy Pelosi (D-Calif.) spoke with credit union representatives in her office yesterday during credit union visits to Capitol Hill. The group told Pelosi about the new Senate version of the Credit Union Regulatory Improvements Act, which is expected to be identical to the House version (H.R. 1537). The California delegation later held a reception at Credit Union House for House CURIA co-sponsor Ed Royce (R-Calif.). From left: Pelosi; Lynn Athens, president/CEO, Spectrum FCU, San Francisco; Annie Oliveto, board member, United Health CU, Burlingame; California Credit Union League President/CEO Bill Cheney; CUNA President/CEO Dan Mica; Patsy Van Ouwerkerk, president/CEO, Travis CU, Vacavill; and Dykstra Diana, president/CEO, San Francisco Fire CU. (Photo provided by CUNA)
WASHINGTON (3/6/08)--Credit union representatives from all over the country amassed to hike Capitol Hill this week as a part of the Credit Union National Association’s Governmental Affairs Conference in Washington, D.C., which attracted 4,500 attendees. At least 18 state leagues had scheduled visits with their state legislators. Among state leagues represented during the hill visits was the California and Nevada Credit Union League, which met with Senate Majority Leader Harry Reid (D-Nev.) and Sen. John Ensign (R-Nev.) at the U.S. Capitol Wednesday afternoon. Credit union representatives from the league encouraged Reid and Ensign to support a version of the Credit Union Regulatory Improvements Act, which Sen. Mary Landrieu (D-La.) announced Wednesday she would introduce in the Senate. Sen. Joe Lieberman (I-Conn.) will co-sponsor. Referencing CURIA, Ensign noted the difficulty of passing new legislation in the upcoming year to due the tight political landscape of a presidential election year, but noted that he’d look at the bill. “It’s not impossible,” he said, though he cautioned that bankers are “still powerful on Capitol Hill.”
Click for slide show U.S. Sen. John Ensign (R-Nevada), left, and Senate Majority Leader Harry Reid (D-Nevada) speak with Nevada credit union representatives Wednesday in the Lyndon Baines Johnson Room of the U.S. Capitol. (Photo provided by CUNA)
Both also confirmed their concerns with the current economy, including the housing crisis. “I know credit unions are feeling the credit crunch,” Reid said, recognizing that credit unions have helped many people. He also noted the high rate of foreclosures in California. Bill Cheney, president of the California and Nevada league, emphasized to Reid and Ensign that while credit unions didn’t create the housing crisis, they’d like to be part of the solution. Representatives from the Wisconsin Credit Union League and Wisconsin credit unions also met with Elissa Levin, the legislative aide of Rep. Tammy Baldwin (D-Wis.). Baldwin is one of 145 CURIA supporters in the House and a long-term credit union supporter. Paul Kundert, president/CEO of UW CU, Madison, asked that Baldwin encourage more of her colleagues to sign on to CURIA. He also made his case in support of a provision to create a risk-based capital system for credit unions and another to allow more member business lending. He said the capital reform plan would free up resources that credit unions could use to better serve their communities. He also noted that credit unions, with a 12.25% of assets cap, are very restricted in the number and amount of small business loans they can offer members, which also can restrict credit union service to their communities. CURIA proposed to increase the limit to 20% of assets. “Our ability to provide more loans is a way to kick start the economy,” added Brett Thompson, president of the Wisconsin CU League.

Rep. Kanjorski Keep working for CURIA

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Click for slide show U.S. Rep. Paul Kanjorski (D-Pa.) encouraged credit unions to keeping pushing for passage of the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). A new bill he and Rep. Ed Royce (R-Calif.) introduced this week is not meant to supplant the more comprehensive package, which is CURIA, he said. CURIA currently has 145 official House supporters. (Photo provided by CUNA)
WASHINGTON (3/6/08)—Rep. Paul Kanjorski (D-Pa.) encouraged credit unions to keeping pushing for passage of the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). A new bill he and Rep. Ed Royce (R-Calif.) introduced this week is not meant to supplant the more comprehensive package, which is CURIA, he said. “My impression is there are a lot of House members up there just waiting to be asked” to support HR 1537, he said at the Credit Union National Association (CUNA) Governmental Affairs Conference (GAC), at which more than 4,500 credit union representatives are attending. CURIA currently sports 145 official backers in the House and it is expected that more will sign on in the wake of credit union visits to federal legislators conducted in conjunction with the CUNA GAC this week. Kanjorski said of CURIA that credit unions “must be cognizant” that such a bill cannot pass in a short period of time. “But it is important that we show progress” toward improving Americans’ access to credit unions, he said explaining part of the motivation behind the second bill, the Credit Union Regulatory Relief Act (CURRA, H.R. 5519). Noting the country’s current housing and general economic woes, Kanjorski said this year the credit union movement is going to be even more necessary and needed by consumers. “You are the leaders. Reach out to your members. Reach out to your communities. America doesn’t need doom and gloom. America needs hope,” he said, adding, “The credit union movement is a real neighbor, a real partner.”

Hood says its prime time to show CU difference

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WASHINGTON (3/5/07)—National Credit Union Administration (NCUA) Vice Chairman Rodney Hood Tuesday said the time is ripe for credit unions to demonstrate how different they are from other financial services providers. “Credit unions were not part of the subprime mortgage debacle, I’m proud to report,” Hood said during the general session of the Credit Union National Association’s Governmental Affairs Conference held here. “You’ve placed the needs of members above exotic mortgages,” Hood said, encouraging credit unions to make capital available and affordable “to those who need it most, when they need it most.” Hood also said all credit unions, regardless of size, must adopt enterprise risk management to enhance their balance sheets and remain viable. He announced that the NCUA will host an enterprise risk management summit Aug. 7 in Chicago for smaller credit unions. The NCUA vice chairman also pledged to work the rest of his term to clarify and simplify field of membership (FOM) provisions, declaring that the agency shouldn’t shy away from FOM extensions for community credit unions and underserved areas. In this economic environment, “the risks and challenges are many,” Hood concluded. “So are the opportunities."

Johnson testifies on state of CU industry

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WASHINGTON (3/5/08)--National Credit Union Administration (NCUA) Chairman JoAnn Johnson testified Tuesday that federally insured credit unions are well capitalized with net worth at 11.4%, total assets of $753 billion, and aggregate net worth of $86 billion, the highest dollar amount in history. She joined federal and state financial regulators testifying before the Senate Banking Committee on “The State of the Banking Industry”. Johnson also addressed foreclosure mitigation efforts, systemic risk, transparency, and risk management techniques being applied to enhance safety and soundness throughout the credit union industry. “NCUA data collection and financial trend monitoring, extensive examination procedures, and strong mortgage lending and risk management guidance in the form of letters to credit unions have been crucial in ensuring the federally chartered credit union system remains financially strong in the midst of real challenges in the mortgage market,” Johnson told the Senate panel. Johnson stressed that riskier nontraditional loans are not prevalent at federally insured credit unions. She noted that 58% of credit union mortgage loans are fixed rate and only 2.3% are interest-only or optional-payment loans. The chairman of the committee, Rep. Christopher Dodd (D-Conn.), pushed the federal banking regulators on whether new international banking capital standards would be sufficient in the aftermath of the subprime mortgage meltdown. (CongressDailyPM, March 4). The chairman expressed concern that proposed Basel II rules could exacerbate problems, as some analysts have observed, because of a greater emphasis on a bank's internal models to assess risk and determine capital when those institutions might want to seek greater profits by minimizing any risk exposure in their modeling.

Ret. Gen. Powells CU education

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WASHINGTON (3/5/08)--Former Secretary of State and retired Gen. Colin Powell said that when he was a young man, credit unions gave him a much-needed financial education. Addressing the 2008 Credit Union National Association (CUNA)
Click to view larger image Addressing the 2008 CUNA GAC, Former Secretary of State and retired Gen. Colin Powell said he was once “one of those ‘little guys’” that credit unions help. The reference was to CUNA’s “Little Guy,” an iconic character used to represent the average working Americans that credit unions serve. (Photo provided by CUNA)
Governmental Affairs Conference, Powell said he was once “one of those ‘little guys’” that credit unions help. The reference was to CUNA’s “Little Guy,” an iconic character used to represent the average working Americans that credit unions serve. Powell said that before joining a credit union, he knew nothing about car loans or mortgages, but his credit union changed that for him. During these times when members are concerned about mortgages and the economy, “you are the one thing people can count on--a safety net, and I thank you for the service you provide,” he said. Since leaving the Bush administration, the four-star general said he has found himself mastering the fine art of retirement—once again. Powell said he also spends time working with a venture capital business finding solutions to biotechnical, green energy, and health-care issues. Retirement has also meant, he said, that he can fully support more causes, such as raising funds for an educational center at the Vietnam Veteran’s Memorial, and the Martin Luther King Jr. Memorial. Powell also acknowledged that credit unions raised $1.2 million to support the MLK, Jr. memorial.

Mica New day for CUs is now

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WASHINGTON (3/5/08)--Citing recent advancements for credit union legislation in Washington, D.C., Credit Union National Association (CUNA) President/CEO Dan Mica declared it the “beginning of a new day” during Tuesday’s opening session at the Governmental Affairs Conference (GAC) here. “It’s the beginning of a new day for credit unions,” Mica said referring to the Credit Union Regulatory Relief Act (CURRA, (H.R. 5519), which was introduced Monday by Reps. Paul Kanjorski (D-Pa.), and Ed Royce (R-Calif.). If enacted, the bill would be the biggest change in the credit union movement in the ten years since H.R. 1151, according to Mica, and it touches on many of the provisions in the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). CURIA currently has 145 co-sponsors. Mica, however, stressed to his audience of more than 4,500 credit union representatives, that although CURRA “will give us some relief,” credit unions must “keep pushing CURIA.” Credit unions need to continue delivering their message to Capitol Hill, particularly in the face of increasing negative pressures form the banking industry, he said. Mica said the relentless attacks on credit unions from bankers represents “true zealotry.” Mica urged credit union involvement both in the upcoming presidential election and in helping those affected by the subprime mortgage debacle. “This is the year we need to get out there and get active,” he said. He emphasized the value of credit unions helping those affected by problem subprime mortgage loans, noting that while credit unions did not cause the problems, they can be a part of the solution. People look for safety, security, compassion and someone they can work with and trust, and credit unions have come out as an entity that people can trust, the CUNA leader said.

Dorety High-impact projects right for CUs

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WASHINGTON (3/5/08)--New Credit Union National Association (CUNA) Board Chairman Tom Dorety
Click to view larger image (CLICK FOR SLIDESHOW) New CUNA Board Chairman Tom Dorety Tuesday said “many credit unions see the wisdom that serving working-class people can benefit those people and the net income of credit unions.” Dorety is president/CEO of Suncoast Schools FCU, Tampa, Fla. (Photo provided by CUNA)
Tuesday challenged credit unions to support high-impact community projects to raise awareness of credit unions among public leaders. Highlighting the importance of credit unions' involvement, Dorety cited the 2008 Herb Wegner Memorial Award Winners: State Employees’ Credit Union Foundation; Harriet May, CEO of GECU of El Paso, Texas; and Bob Hoel, former Filene Research Institute executive director. Dorety, CEO of Suncoast Schools FCU. Tampa, Fla., was addressing CUNA’s 2008 Governmental Affairs Conference here. Few credit unions could raise more than $7 million as State Employees’ Credit Union Foundation has done, Dorety noted. But he advised that as a percentage of assets that amount is equivalent to $50,000 for a $100 million-asset credit union and $5,000 for a $10 million-asset credit union. “If all credit unions did that, think of the good we could do,” he said. Dorety said it would be “foolish” to oppose Congress’ and regulators’ efforts to hold credit unions accountable for their H.R. 1151-mandated mission to serve people of modest means. Fortunately, he added, “many credit unions see the wisdom that serving working-class people can benefit those people and the net income of credit unions.” And, he added, doing so helps credit unions connect with their members.

Hyland Exec pay was task force hot button

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WASHINGTON (3/5/08)—National Credit Union Administration (NCUA) board member Gigi Hyland said Tuesday that if there was a “hot button” topic as her agency gathered information for its Outreach Task Force, it was whether or not information should be gathered or revealed on senior executive officer compensation. Hyland, addressing the Credit Union National Association’s (CUNA) Governmental Affairs conference, said credit unions identified privacy issues and regulatory burden as among their primary concerns related to the subject. She noted, however, that the cross-industry direction of public policy in this area is toward disclosures of executive compensation. In fact, the task force report pointed out that increased transparency of executive compensation would improve "accountability and be more consistent with the prevailing public policy." Hyland detailed the recent Outreach Task Force report--unveiled last week. She noted that the 85-page report carries 12 recommendations allocated to three areas in addition to compensation reports: Membership profile and financial services; low-income definition; and NCUA outreach. Hyland, who chaired the task force, said only two of the recommendations would require public notice and board action. But she underscored that the process begun by the task force is far from over. The fact-finding group spent about a year delving into internal information within the agency as well as conducting Town Hall-style meetings to gain insights from the credit union movement. Now that the report has been issued, Hyland said, the three members of the NCUA board must digest and discuss the recommendations prior to deciding what actions to take.

Inside Washington (03/04/2008)

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* WASHINGTON (3/5/08)—No bank will be ready for Basel II when it goes into effect April 1, said Comptroller of the Currency John Dugan Monday (American Banker March 4). The 12 largest banks in the U.S. have to notify their supervisors two months before switching to it, and the Office of the Comptroller of the Currency has not received any notifications yet, he said … * WASHINGTON (3/5/08)—The Ways and Means Committee is being pressured by the House Financial Services Committee to push legislation that would let the Federal Home Loan Banks place guarantees on tax-exempt bonds (American Banker March 4). Because the legislation would raise debt ratings, it could lower costs for municipal borrowing, said members of the House Financial Services committee. The committee sent a letter to Rep. Jim McCrery (R-La.), and House Ways and Means Committee Charles Rangel (D-N.Y.), Ways and Means chairman, encouraging them to act on the legislation … * WASHINGTON (3/5/08)—A Government Accountability Office (GAO) report requested by Rep. Carolyn Maloney (D-N.Y.) indicated that bank fees are increasing and are often kept from consumers. The report indicated that bank fees, on average, are higher than credit union fees. Maloney, who has introduced a bill that would crack down on overdraft fees by allowing consumers to adopt overdraft protection, noted that it’s troubling that many consumers do not have adequate information regarding account terms before they open an account. “The free market works properly when consumers know the terms of a contract and can make informed choices based on complete and accurate information,” she said …

Video reports from the CUNA GAC

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WASHINGTON (3/4/08)--The Michigan Credit Union League (MCUL) is producing daily video reports from the 2008 Credit Union National Association (CUNA) Governmental Affairs Conference (GAC) in Washington D.C. Mike Bridges, MCUL director of public affairs, will file video reports daily. The reports will focus on the general sessions, the speakers and Capitol Hill visits. Views also will also see some of the flavor of the conference, according to Bridges. Tuesday’s report will look at the general sessions and how the credit unions are preparing for Hill visits. Also included is a first-hand look at the exhibition hall and services that will make a difference for credit unions. Use the link below to access the “Live from CUNA GAC” videos.

NCUA offers mortgage good habits tips

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ALEXANDRIA, Va. (3/4/08)—The National Credit Union Administration (NCUA) used National Consumer Week, designated as March 2-8 by President George W. Bush, as a springboard for a message to consumers about "good mortgage habits.” NCUA Chairman JoAnn Johnson, a member of the President’s Financial Literacy and Education Commission, said in a release Monday that it is crucial that consumers have useful and understandable information when making financial decisions—particularly the purchase of a home. Johnson outlined the following responsible mortgage habits for borrowers:
* Assess low fixed rates or very low payment amounts that may turn out to be valid only for an introductory period. Be aware that rates can rise substantially following that timeframe, which could substantially push up payment amounts; * Understand terms. Know that "low rate" could mean either the payment rate or interest rate. While the interest rate is the rate used to calculate the amount of interest a borrower will owe the lender each month, the payment rate is the rate used to calculate the amount of the payment the borrower is obligated to make each month. If the payment rate is less than the interest rate, interest due will not be covered and the loan balance will increase; and * Review all correspondence to ensure a lender is reputable and responsible.
Johnson noted that "financial education is an important step in helping consumers navigate the complex mortgage lending market. I encourage credit unions to continue proactive efforts to inform their members about these issues.” For more information, use the link.

Inside Washington (03/03/2008)

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* WASHINGTON (3/4/08)—The Office of the Comptroller of the Currency (OCC) will collect data on national bank mortgage servicers’ loan modification efforts. The OCC is encouraging the servicers to use the HOPE NOW alliance standards to report their efforts. Loss mitigation that preserves homeownership is in the best interest of borrowers, servicers and investors because it is less expensive than foreclosure. The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision were expected to issue similar communications to their institutions, the agency said … * WASHINGTON (3/4/08)—The Office of Federal Housing Enterprise Oversight, Fannie Mae, Freddie Mac and New York State Attorney General Andrew Cuomo have signed agreements to improve appraisal and evaluation services critical to the residential mortgage process. The agreement includes provisions such as eliminating broker-ordered appraisals, reducing the use of appraisals prepared in-house and prohibiting appraisal coercion and creates a complaint hotline for consumers. A Home Valuation Code of Conduct that will apply to lenders selling mortgages to Fannie and Freddie will be effective Jan. 1, 2009. An Independent Valuation Protection Institute also will be created and funded by the enterprises …

CUNA New bill good but CUs need more

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WASHINGTON (3/4/08)—Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) introduced a new credit union bill Monday, one which would offer regulatory relief in 12 areas but does not go as far as the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). The bill was introduced just four days before a scheduled House Financial Services Committee hearing CURIA. Kanjorski heads that panel’s subcommittee on capital markets. Although it touches on many areas of CURIA, the new bill (H.R. 5519) does not contain language to increase the credit union member business lending ceiling or to transform prompt corrective action into a more risk-based system. H.R. 5519 is entitled the Credit Union Regulatory Relief Act (CURRA) of 2008. Credit Union National Association (CUNA) President/CEO Dan Mica said Monday, “We commend and thank Reps. Kanjorski and Royce for taking this bold step aimed at reducing the regulatory burden on credit unions. This timely legislation will get us a long way toward credit union goals--but not all the way: More needs to be done.” “Easing restrictions on business lending and providing more flexibility for credit unions in net worth requirements remain key goals for us. We will continue to urge Congress to consider CURIA, and will continue to seek co-sponsors for this important legislation," Mica said from CUNA’s Governmental Affairs Conference (GAC) here. As of Monday evening, CURIA carried 145 official supporters in the House. The new CURRA bill would:
* Permit the purchase of investment grade securities by federal credit unions ; * Increase the investment limit in credit union service organizations; * Exclude from the member business lending cap any loans to nonprofit religious organizations; * Allow the National Credit Union Administration (NCUA) to establish longer maturities for certain credit union loans; * Give the NCUA greater flexibility in responding to market conditions; * Permit, under certain circumstances, a federal credit union converting to a community charter to continue to serve groups outside the community; * Enable credit union participation in the Small Business Administration’s 504 programs; * Permit federal credit union to add service to underserved areas regardless of original field of membership; * Permit federal credit unions to provide for short-term payday loan alternatives for nonmembers within a the credit union ' s field of membership; * Permit a federal credit union to expel a member for cause, and to institute term limits for board members if it so chooses; * Encourage small business development in underserved urban and rural communities by providing for the exclusion of member business loans made in underserved areas from the business lending cap ; and * Provide an exemption from pre-merger notification of the Clayton Act.

Top UBIT issues in free CUNA webinar today

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WASHINGTON (3/4/08)—The Credit Union National Association (CUNA) is offering a free webinar today on issues surrounding unrelated business income tax (UBIT) for credit unions. The webinar will spotlight the latest information on a federal court challenge to the Internal Revenue Service’s (IRS) determinations that certain insurance products offered to members fall outside the credit union's main mission and are subject to UBIT. It is being broadcast as part of the breakout sessions offered during CUNA’s Governmental Affairs Conference here this week In January, Community First CU, Appleton, Wis., filed a court challenge against the IRS regarding its determination on insurance products. The credit union said at issue is about $54,000 in taxes it paid in 2006 on income from the sale of credit life and credit disability insurance, and guaranteed auto protection (GAP) insurance. While it is unlikely any outside parties will be allowed to join the suit, the credit union’s action is backed by CUNA, American Association of Credit Union Leagues, National Association of State Credit Union Supervisors NASCUS), and CUNA Mutual Group, which comprise the credit union movement’s UBIT Steering Committee. “The IRS position is untenable,” Eric Richard, CUNA’s executive vice president/general counsel has said. “They say credit unions should pay taxes even on some financial services products offered to their own members on a cooperative, not-for-profit basis. That’s just wrong. And we think the court will agree with us.” Scheduled panelists for the UBIT webinar include:
* Mary Martha Fortney, president/CEO, NASCUS; * Faye Patzner, chief legal officer, CUNA Mutual Group * CUNA’s Eric Richard, and * Brett Thompson, president, Wisconsin CU League.
Use the resource link below for more information about the free 2 p.m. ET webinar.

CUs should be heard with one voice

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WASHINGTON (3/4/08)--Exiting Credit Union National Association (CUNA) Chairman Allan Kemp McMorris and CUNA President/CEO Dan Mica took the stage at the Annual General Meeting at the Governmental Affairs Conference (GAC) Monday and exhorted credit unions to make themselves heard and to speak with “one voice.” “The most important lesson I’ve learned in my tenure (as chairman) is that the credit union movement is best served when we speak with one voice,” McMorris said. “We must continue to make our voice heard in Washington and in our state capitals.” If credit unions don’t make their voice heard, legislators will only hear bankers’ attacks on credit unions, he said.
Click to view larger imageCLICK FOR A GAC SLIDESHOW) CUNA President/CEO Dan Mica told attendees Monday that the partnership of CUNA, leagues and credit unions joins together to ensure the nation's consumers a strong, robust credit union movement, ready to serve their needs. (Photo provided by CUNA)
He also noted that in the eight years he has spent on the CUNA board, he has appreciated the “limitless power” that is released when people work together. McMorris noted the accomplishments of the membership growth task force. The task force identified strategies for growing membership, including: raising public awareness of the credit union difference, compiling credit union best practices, studying cost efficiencies and examining markets and demographics to help credit unions find ways to better serve members. He also noted the recommendations of the financial literacy task force, including an awards program for credit unions that actively improve member financial literacy. He also touched on PF Interactive, CUNA’s brand new social network for credit union financial leaders, where credit union professionals can share best practices. CUNA's Mica presented a 2007 roundup that highlighted the progress credit unions have made in efforts to “change the conversation” and let credit unions speak for themselves on Capitol Hill and in the media. Mica noted the success of an ongoing communications outreach program started last year. It successfully placed CUNA and other credit union representatives in stories in publications ranging from The Washington Post and the Wall Street Journal, to media outlets such as MarketWatch, Bloomberg TV and Bloomberg Radio. Mica also described how CUNA worked to break through the clutter of messages aimed at Capitol Hill by using “non-traditional” methods to get out the credit union message. He noted the introduction of “The Little Guy,” an iconic character symbolizing who it is that credit unions represent. The Little Guy appeared at least 65,000 times on Capitol Hill last year in the form of buttons, in YouTube videos, as “leave behinds” in congressional visits, ads in Hill publications, street theater, editorial cartoons, t-shirts, mint-tins, and video e-mails. The efforts, Mica emphasized, have culminated in this week’s House Financial Services Committee hearing on credit union regulatory improvements—the “first official, full committee” hearing focusing solely on credit union issues in 10 years.

Deep pool of untapped members shown in CUNA research

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WASHINGTON (3/4/08)—There are significant opportunities to attract new members within current fields of membership according to Credit Union National Association (CUNA) research, which finds that for many credit unions, reaching out will be increasingly important. In a presentation at CUNA’s Governmental Affairs Conference here, Dick Ensweiler identified three key new markets for credit union membership growth: Youth, immigrant and ethnic groups, and underserved segments of a community. Ensweiler is chairman of CUNA’s Membership Growth Task Force, as well as head of the Texas CU League. The task force was formed in 2007 to “investigate, report on, and encourage credit unions to embrace opportunities, techniques and processes” that will increase membership retention and growth, Ensweiler noted in his address. The task force, he said, encourages credit unions to:
* Develop more community partnerships; * Continue to push to change laws and regulations in ways that would bolster service to the target markets; and * Increase participation in the REAL Solutions program to offer new products and services to attract more members from low-wealth and modest means households.
Ensweiler advised that with any program meant to reach the target groups for membership the message focus should be one that reflects credit unions “trust, respect, care” of and for members. He also prodded those interested in growth to explore new media options, such as YouTube, Google, MySpace, as well as blogs and more.

Dorety elected CUNA Board chairman

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WASHINGTON (3/4/08)--The Credit Union National Association (CUNA) Board elected four of its members yesterday to join new Chairman Tom Dorety on the CUNA Executive Committee. Dorety succeeds outgoing chairman Allan Kemp McMorris, president/CEO of Oakland County CU, Waterford, Mich. Dorety is president/CEO of Suncoast Schools FCU in Tampa, Fla. Other officers are:
* Vice Chairman: Kris Mecham, Deseret First CU, Salt Lake City; * Secretary: Harriet May, president/CEO, GECU, El Paso, Texas; * Treasurer: Mike Mercer, president/CEO, Georgia Credit Union League; and * Executive Committee Member At-large: Patricia Wesenberg, Point Plus CU, Stevens Point, Wis.

Johnson to testify at State of Banking hearing

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WASHINGTON (3/3/08)—National Credit Union Administration (NCUA) Chairman JoAnn Johnson is scheduled to be part of a panel of six federal financial regulators testifying before the Senate Banking Committee tomorrow. The hearing is entitled “The State of the Banking Industry.” In addition to Johnson, the witness list names Sheila Bair, chairman, Federal Deposit Insurance Corp., John Dugan, Comptroller of the Currency, John Reich, director, Office of Thrift Supervision, and Thomas Gronstal, Iowa Superintendent of Banking, as scheduled to testify. Later in the week Johnson is slated to testify before the House Financial Services Committee on the need for credit union regulatory relief and improvements. Major discussion is expected to be devoted to provisions of the Credit Union Regulatory Improvements Act (CURIA, H.R.1537), a bill currently with 145 official supporters in the House. Both hearings are set to take place during the Credit Union National Association’s 2008 Governmental Affairs Conference (GAC) in Washington. The authors of CURIA, Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.), as well as Chairman Barney Frank (D-Mass.) of the House financial services panel, are scheduled to address the record crowd of approximately 4,500 credit union representatives at the GAC.