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Washington Archive

Washington

Tax day: Cheney reminds, CU exemption staunchly serves original purpose

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WASHINGTON (4/15/14)--It's tax day and what better day is there, asks Credit Union National Association President/CEO Bill Cheney, to remind credit unions and their members that the tax treatment of credit unions continues to serve the purpose for which it was created--namely, to create substantial financial benefits to members and to the public, far in excess of the cost.
 
"Every April 15, we should all be mindful of our tax exemption, and remind our members and our communities that Congress should not tax credit unions because doing so would represent a tax increase on 99 million Americans. It would likely lead to the elimination of many, if not most, credit unions," Cheney says.
 
According to the latest numbers and estimates gathered by CUNA:
  • The benefits that credit unions provide to both members and others--amounting to an estimated $8.5 billion in 2013 alone--far exceed the total annual tax that could be raised by taxing credit unions (less than one-tenth of that amount, on average, annually).
  • Those benefits are realized by credit union members in the forms of higher returns on savings, lower rates on loans, and lower or fewer fees than members would have paid or received had they been customers at other financial institutions. Those totaled $6.1 billion in 2013.
  • In addition, several independent researchers have found that credit unions have a moderating influence on bank pricing: raising bank deposit interest rates and lowering bank loan rates. Based on this research, CUNA estimates that bank customers saved about $2.4 billion in 2013 from more favorable pricing due to the presence of credit unions in their local markets.
  • Over the past eight years credit union benefits have totaled an estimated $87.3 billion.
The CUNA leader noted the recent decision by the House Ways and Means Committee to leave intact the credit union tax exemption in the committee's proposed tax reform plan, and thanked committee members for doing so.
 
"Thanks to Chairman Dave Camp (R-Mich.) and ranking member Sander Levin (D-Mich.) and rest of the committee for maintaining our tax status," Cheney said. "Repealing the credit union tax exemption would result in negative consequences for savers and borrowers, the most severe of which would be the erosion of a credit union option for millions of Americans. Credit unions must continue to remind their lawmakers, and the public, of the importance and value of the tax exemption."

White House housing finance policy discussions: CUNA warns of reg burden

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WASHINGTON (4/15/14)--Policymakers must be mindful of the existing regulatory obligations of credit unions and other mortgage servicers as discussions on housing finance reform proceed. That was one of the messages delivered by the Credit Union National Association at a Monday meeting with White House and U.S. Treasury staff. At the White House meeting, CUNA noted that a pending Senate bill to revamp the housing finance system proposes creation of a new regulatory authority over mortgage servicing operations. CUNA stressed that policymakers must proceed judiciously and not layer additional regulatory authority on top of existing regulatory regimes that address mortgage servicing. CUNA also underscored on credit unions' behalf that a new system must ensure that the housing finance market remains accessible to credit unions and other smaller institutions and that structure must be in place to prohibit domination by the country's biggest banks. The meeting was part of a series of stakeholders' sessions that have been being held as the Senate Banking Committee prepares to consider the Johnson-Crapo housing finance reform bill on April 29. (See related story: New FHFA director meets with CUNA on housing, mortgage issues.)

New FHFA director meets with CUNA on housing, mortgage issues

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WASHINGTON (4/15/14)--The Credit Union National Association met with new Federal Housing Finance Agency Director Mel Watt Monday, raising a number of issues of concern to credit unions. At the FHFA meeting, the sale in the secondary market of non-Qualified Mortgage (QM) loans, containing guarantee fees, and increasing loan limits for eligible loans were among the issues CUNA addressed with Watt and members of his senior staff. Other issues that CUNA discussed during the session included the director's priorities, the role of credit unions in the mortgage market and CUNA's efforts on housing finance reform to ensure credit unions' interests are fully protected. CUNA President/CEO Bill Cheney stated after the meeting, "This was an important inaugural meeting with Director Watt as he has only been at the agency for about 100 days. "Credit union mortgage lenders, which have about 7% of the single family home loan market, are very concerned about these issues. This discussion provided an important opportunity to ensure credit union concerns, including fair and equitable access to the secondary mortgage market, are given due consideration by the agency." Cheney was accompanied by General Counsel Eric Richard, Deputy General Counsel Mary Dunn, Senior Vice President for Legislative Affairs Ryan Donovan and Chief Economist Bill Hampel. CUNA will be following up with FHFA staff in the coming weeks to continue to advocate for credit union issues. Also on Monday, CUNA staff attended another in a series of White House housing finance reform policy discussions. (See related story: CUNA warns of reg burden at White House housing finance policy discussions.)

CUNA reminds CUs of tax Form 990 deadline

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WASHINGTON (4/15/14)--With taxes on everyone's mind today, the Credit Union National Association reminds credit unions of another looming deadline: Many credit union leagues and state-chartered credit unions must file their Internal Revenue Service Form 990 for 2013 by May 15.

Those that fail to file by May 15 risk losing their tax-exempt status. Organizations will see their federal tax exemptions automatically revoked if they have not filed reports for three consecutive years, according to the IRS.
 
State-chartered credit unions are required to file Form 990 with the IRS annually, although a few states still permit group 990 filings. Federal credit unions are not required to file, since they are not subject to unrelated business income taxes.

Small tax-exempt organizations with annual receipts of $50,000 or less can file an electronic notice Form 990-N (e-Postcard). Tax-exempts with annual receipts above $50,000 must file a Form 990 or 990-EZ, depending on their annual receipts. Filing extensions are available.

The IRS, not surprisingly, has been on a roll, putting out information that might help tax filers get the job done before the deadline falls. This one might help a lot of people today: Advice to help last-minute filers avoid common filing mistakes (see resource link).
 
The tax agency also offered these recently:
  • Social media tools to help filers check their refund status and get the latest tax information (see resource link); and,
  • Details on more than 200 new IRS investigations into identity theft and refund fraud schemes (see resource link).

What's on radar for Congress' April 28 return

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WASHINGTON (4/15/14)--The U.S. Congress is out of session for a two-week Spring District Work Session, but the Credit Union National Association continues its advocacy work on key credit union issues.
 
A credit union priority that will return to prominence after this late-April break is housing finance reform. CUNA continues to meet with Senate staff in advance of a planned April 29 mark-up of reform legislation drafted by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and ranking Republican member Mike Crapo (Idaho). (See related story: XXXXXX)
 
CUNA last week outlined several housing finance reform concerns and suggested language to address those issues in a joint trade group letter to Johnson and Crapo, and expects to have additional discussions with staff and perhaps see modifications made to the Johnson-Crapo bill in the coming weeks.
 
CUNA is also working in anticipation of a vote on patent reform legislation--a markup session that was postponed three times prior to the break. The Senate Judiciary Committee is expected to take up consideration of that bill, the Patent Transparency and Improvements Act (S. 1720), soon after returning to session.
 
CUNA and credit unions will also be watching Senate calendars closely to see when a confirmation vote might occur for National Credit Union Administration nominee Mark McWatters. The Senate Banking Committee conducted a hearing on the McWatters nomination, along with other Obama administration nominees, on March 13.

CFPB announces forum on mortgage closing process

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WASHINGTON (4/15/14)--Consumer groups, the general public and financial services industry representatives will discuss the mortgage closing process with the Consumer Financial Protection Bureau in an April 23 forum in Washington.
 
The forum is scheduled to begin at 1:30 p.m. (ET) and will feature remarks from CFPB Director Richard Cordray and others. The event will also be streamed live on the CFPB's blog.
 
The CFPB earlier this year asked consumers, realtors, settlement closing agents, attorneys, financial counselors and others to provide their mortgage closing "pain points" and suggest how those particular concerns might be addressed by market innovations and technology.
 
The Credit Union National Association, in a letter to the CFPB, said credit union members are often overwhelmed with the sheer amount of paperwork required and the number of disclosures they receive at closing. CUNA suggested that many closing documents could be consolidated.
 
While many borrowers feel helpless at closing, credit unions have suggested that clearly laid out, simplified financial information about the transaction would aid the borrowers and lenders. The agency said it plans to research and test solutions that would address certain closing issues.
 
For the CUNA comment letter and more on the planned CFPB session, use the resource links.