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S.D. CUs discuss reg burden with CFPBs Cordray Sen. Banking chair

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SIOUX FALLS, S.D.  (4/12/12) --
Click to view larger image CFPB Director Richard Cordray; Leandra English, CFPB senior advisor for external affairs, meet with South Dakota credit unions community banks.
South Dakota credit unions emphasized the importance of helping consumers without adding unnecessarily to their regulatory burden during a meeting in Sioux Falls yesterday with Consumer Financial Protection Bureau  (CFPB) Director Richard Cordray and Sen. Tim Johnson (D-S.D.), the chairman of the Senate Banking Committee.

Robbie Thompson, president of the CUAD, told News Now that Sen. Johnson made clear at the session that he understood that credit unions and community banks did not cause the financial crisis, and said that was why he authored the provision in the Dodd-Frank financial reform law directing the CFPB to consider the impact of its rules on smaller financial institutions, including credit unions and community banks in rural areas.

The Credit Union National Association, the leagues and credit unions supported this key provision.

Click to view larger image Jeff Schmidt, middle, chief operating officer, Voyage FCU, Sioux Falls, S.D., at roundtable of South Dakota credit unions, community banks. (Photos provided by Credit Union Association of the Dakotas)
"This was a great opportunity to hear directly from the CFPB director and receive some assurances that their mission aligns with ours," said Thompson.

"Our credit unions are concerned about the impact of the CFPB on our overall regulatory burden, and any time we have a chance to express this point face to face with the director, it is a welcome opportunity.  We thank Mr. Cordray for his participation and applaud Sen. Johnson in his efforts to ensure that credit unions were included in this meeting with the CFPB."

The roundtable session also included a panel discussion with three financial institution representatives from a larger bank, a community bank, and credit union.

Speaking for credit unions on the panel was Jeff Schmidt, chief operating officer of Voyage FCU in Sioux Falls and chairman of CUAD's governmental affairs committee.  The panel focused on the burdens of regulations and how difficult it can be to manage the load, especially when an institution is smaller in size.

CUs iNational Journali to revitalize playground at Tampa childrens hospital

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ST. PETERSBURG, Fla. (4/13/12)--All Children's Hospital in St. Petersburg, Fla., will soon boast a freshly renovated playground for its patients and their families through funds raised with the help of credit unions. Groundbreaking took place yesterday on the "leave behind" project, which will retrofit an existing playground with special play equipment for ill and injured children suffering from a variety of illnesses and accidents, will honor the 2012 Republican National Convention taking place in nearby Tampa.

Credit Union National Association (CUNA) Board Chair Mike Mercer, League of Southeastern Credit Unions President/CEO Patrick La Pine, the National Journal Group's Political Correspondent and event emcee Beth Reinhard, All Children's Hospital's Physician-in-Chief and Interim President Dr. Jonathan Ellen, St. Petersburg Mayor Bill Foster and Rep. Bill Young (R-Fla.) broke ground for the playground project.

Mayor Foster said he is "grateful to everyone who is helping to make this playground a lasting legacy for the families of St. Pete," and  Congressman Young said "seeing all these groups come together to provide a safe place where children can rehabilitate while at the same time play and have fun is a way in which they can give back to our area and demonstrate what the spirit of the upcoming convention is all about."

La Pine noted that Florida credit unions have a long history of supporting All Children's Hospital, with $1.5 million in donations and supporting the development of a 28-bed Pediatric Intensive Care Unit, a state-of-the art dialysis wing and a new autism center. The playground project gives the league and others a chance "to demonstrate that credit unions are local and give more to their communities than just financial services."

Dr. Ellen thanked the group for making the vision of a therapeutic playground "a reality for All Children's patients and their families."

The Republican National Convention is scheduled to begin on August 27 and end on August 30.

A similar project that would build a rooftop playground was kicked off last week at Levine Children's Hospital in Charlotte, N.C. Charlotte is the location of the 2012 Democratic National Convention. (See related April 6 News Now story, CUs help kick off hospital project for conventions)

Since 2000, credit unions have honored the host cities for each national convention with a "leave behind" project that benefits local communities.

The two projects will cost a combined $600,000, and credit unions nationwide, the Carolinas Credit Union Foundation, the Southeastern Credit Union Foundation, CO-OP Financial Services, and CUNA Mutual Group are raising funds for the projects. National Journal is also sponsoring the renovations.

Credit unions really see this as an opportunity to leave something positive behind that will continue to benefit the Charlotte and Tampa communities long after the balloons have dropped and the convention ended," CUNA President/CEO Bill Cheney said.

NCUA suggests CU agency steps to improve exams

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ALEXANDRIA, Va. (4/12/12)--In this month's National Credit Union Administration (NCUA) Report, Director of Examinations and Insurance Larry Fazio said NCUA examiners and credit union management "can both take a lot of specific steps to contribute to a conducive exam environment."

Fazio said these steps include:
  • discussing expectations;
  • setting ground rules and the exam approach upfront;
  • agreeing to a regular update schedule during the examination so there are no surprises for the examiners or members of a credit union's management team;
  • coordinating how examiners and credit union staff will interact, and how these interactions will impact the credit union; and
  • reviewing the specific risks that were identified during the examination, and discussing how those risks will be resolved.
"Each of these steps largely revolves around effective communication," he said. Fazio noted that the agency will soon kick off a series of "listening sessions" with credit unions across the country.

The NCUA listening sessions will begin on May 2 in Boston, Mass., and are also scheduled for:
  • May 9 in Alexandria, Va.;
  • June 5 in St. Louis, Mo.;
  • June 12 in Orlando, Fla.;
  • July 10 in San Diego, Calif.; and
  • July 31 in Denver, Colo.
Fazio said during these meetings he is interested in hearing opinions on how examiners and credit unions can better "understand and recognize the challenges and demands of their corresponding roles, and the associated points of view."

He added that he wants to listen to suggestions on best practices NCUA examiners can use to achieve results-oriented examinations conducted with professionalism and empathy, and thoughts on how to build "a constructive working relationship and trust" between examiners and credit unions. He said he is also looking forward to discussing how credit union management should interact with examiners, and how the appeals process for examiner decisions could be improved.

For the full NCUA Report, use the resource link.

CUNA takes on banks for MBL claims

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Click to view larger image Click to download pdf
WASHINGTON (4/12/12)--The Credit Union National Association (CUNA) is warning lawmakers to not be fooled by the misinformation being circulated by bankers in an attempt to derail potential Senate action that could increase the credit union member business lending (MBL) cap."

Sen. Mark Udall's (D-Colo.) legislation, S. 2231, would increase the MBL cap from 12.25% of assets to 27.5% of assets, injecting $13 billion in new funds into the economy and creating 140,000 new jobs, at no cost to taxpayers, CUNA has said. A vote on the Senate bill is expected once members of Congress return to Washington on April 16, and Rep. Ed Royce (R-Calif.), a key sponsor of House MBL legislation, has promised a vote on his bill after any Senate action.

CUNA Senior Vice President of Legislative Affairs Ryan Donovan said "bankers have been pelting legislators with twisted facts ahead of the vote."

To challenge this misinformation campaign, CUNA has distributed a fact sheet that corrects banker assertions to all members of Congress.

The fact sheet notes that:

  • Credit unions have been lending to small businesses for more than 100 years;
  • More than 500 credit unions are or will be bumping against the MBL cap in under three years, and the low current cap of 12.25% of assets means that two-thirds of credit unions, most of which hold under $50 million in assets, cannot justify the cost of investing in new business lending programs;
  • The average credit union business loan is $219,000; and
  • MBL cap increase legislation is not, in fact, "controversial," but has been introduced in each of the last four Congresses.
MBL cap increase legislation "is only controversial because the banks don't like it… everyone else thinks it's a no-brainer," the fact sheet adds.

Kids fin lit site launched by NCUA

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ALEXANDRIA, Va. (4/12/12)--Pocket Cents, a new website that introduces young people to the benefits of credit unions and the importance of setting financial goals, was unveiled by the National Credit Union Administration (NCUA) on Wednesday.

During the unveiling,  NCUA Chairman Debbie Matz noted the agency is committed to developing financial literacy materials for people of all ages.

The  new site specifically  includes information and tools to teach school-aged youth about the history of credit unions, how to locate a credit union nearby, and how to start their own credit union at their school. The site also addresses positive financial habits, offers important lessons about the value of a dollar, and, for fun, contains a map section that allows users explore the currencies of different nations.

The Pocket Cents website launch is part of the  NCUA's celebration of April as  national financial literacy month. The agency also is using Twitter and other social media outlets to help increase financial literacy, addressing issues such as taxes, money management for youth, savings, investing, retirement, and homeownership. (See related April 3 News Now story: CFPB, NCUA promote financial literacy month.)

The Credit Union National Association (CUNA) is also marking Financial Literacy Month by continuing its annual sponsorship of the  National Youth Saving Challenge, and credit unions across the country are also encouraging their members to budget, save, manage credit, and pay down debt. (See related March 30 News Now story: April is National

Financial Literacy Month.)

For more on the NCUA's new site, use the resource link.

Inside Washington (04/11/2012)

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  • WASHINGTON (4/12/12)--Mortgage servicers say that upcoming proposed rules from the Consumer Financial Protection Bureau (CFPB) will require come at a high compliance expense that could trickle down to borrowers. The proposed rules, scheduled to be made by the CFPB this summer, would require servicers to provide more disclosures and increased assistance for struggling homeowners (American Banker April 11). Servicers would provide monthly mortgage statements and advance notice of interest rate increases for adjustable rate mortgages, and place new limits on force-placed insurance. Servicers would be required to post mortgage payments promptly, and to increase mortgage holder ease of access to their own account information, and to quickly correct account errors. Compliance with the new changes comes down to technology, observers said. Robert Cook, a partner with HudsonCook LLP, said servicing systems will require reprogramming to meet the new requirements. The faster servicers are required to make the change the more expensive it will be, he said. CFPB Director Richard Cordray said Tuesday the agency understands that a one-size-fits-all approach may not be appropriate for smaller institutions such as credit unions and community banks …
  • WASHINGTON (4/12/12)--Edward DeMarco, the acting director of the Federal Housing Finance Agency outlined his objections to allowing Fannie Mae and Freddie Mac to pursue a broad principal forgiveness program for troubled homeowners. "This is not about some huge difference-making program that will rescue the housing market," DeMarco said. "It is a debate about which tools, at the margin, better balance two goals: maximizing assistance to several hundred thousand homeowners while minimizing further cost to all other homeowners and taxpayers." The anticipated benefit of principal forgiveness is that by reducing foreclosures relative to other modification types, losses would be lowered and housing prices would stabilize faster, producing broad market benefits, DeMarco said. However a larger group of underwater borrowers who have remained faithful to paying their mortgage obligations are a greater risk to housing markets and to taxpayers, he added. Encouraging their continued success could have a greater positive impact on the recovery of housing markets, he said …