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CU among those awarded total of 10M for tax advice

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WASHINGTON (4/21/10)--El Paso Credit Union HOAP, Inc., of Texas, was among the 160 organizations that received a total of $10 million in matching grants to Low Income Taxpayer Clinics (LITCs) for the Internal Revenue Service (IRS) 2010 grant cycle. LITCs represent low-income taxpayers in federal tax disputes the IRS for free or for a small charge. The LITCs also may provide tax education and outreach for taxpayers who speak English as a second language. El Paso CU Union HOAP received a grant of $39,787. Through the LITC program, the IRS awards matching grants of up to $100,000 a year to qualifying organizations. Use the resource link below for more information.

NCUA backs tougher enforcement promise

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ALEXANDRIA, Va. (4/21/10)--As promised last November, the National Credit Union Administration (NCUA) is increasing public disclosure of its interactions with troubled credit unions. The NCUA recently disclosed a pair of letters of understanding that the agency entered into with management at a pair of credit unions. These letters were meant to “correct noted adverse conditions” such as “untimely and inaccurate recordkeeping,” inadequate recordkeeping processes, and loan issues that were “of concern” to the NCUA. Specifically, the NCUA after an in-house examination found that outstanding items on one credit union’s reconcilements were over six months old and had not been cleared. In addition, the NCUA said that general ledger account reconciliations were “not consistently performed in a timely manner.” The NCUA also criticized the credit union for failing to base its loan limits on “credit risk and income levels.” In another separate letter released by the Agency, a credit union agreed with NCUA demands to “accurately complete applications for all new members” and offer credit union services only to those members. The NCUA during an examination found that the credit union “took an overly expansive view” of its field of membership and “accepted share accounts from, and extended loans to, individuals otherwise unqualified for membership.” NCUA Chairman Debbie Matz said late last year that while the NCUA did not intend to discourage lending, its examiners would take public administrative actions to ensure compliance by credit unions and could potentially follow up with public letters of understanding and agreement or cease and desist orders if a credit union has not followed NCUA recommendations. For the NCUA letters, use the resource link.

CDFI fund releases NMTC QandA

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WASHINGTON (4/21/10)--Following the opening of its 2010 round of the New Markets Tax Credit (NMTC) program on April 7, the Community Development Financial Institutions (CDFI) Fund released a series of questions and answers. Credit unions are among those eligible to participate in the NMTC, which seeks to spur the investment of new private sector capital into low-income communities by permitting individual or corporate taxpayers to receive a credit against federal income taxes for making Qualified Equity Investments. Those investments must be made in designated Community Development Entities. Organizations that have received credits through the NMTC program, which has been given $5 billion in tax credit authority for 2010, have raised $15.8 billion in equity investments since the program began in 2002, the CDFI recently said. The Q&A covers the basics of the NMTC program, including who may apply for the tax credits and how they may apply for those credits, and also addresses more complex issues such as whether organizations that focus on urban markets and do not intend to invest in non-metropolitan counties will be disadvantaged in the 2010 NMTC application round. A number of more detailed topics are also covered by the Q&A. For the full Q&A, use the resource link.

Inside Washington (04/20/2010)

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* WASHINGTON (4/21/10)-A proposal to charge big banks a 15 basis point fee on their liabilities is gaining ground again. The proposal--intended to cover Troubled Asset Relieve Program (TARP) losses--lost momentum in January when TARP appeared to generate a profit. However, the Senate Finance Committee was scheduled to tackle the issue at a hearing Tuesday, and Rep. Sander Levin (D-Mich.) endorsed the fee Monday. The Group of 20 also could discuss a potential global bank tax as the International Monetary Fund releases a report on its likelihood (American Banker April 20). It’s unknown how the fee would be levied, because the White House proposal only said that companies with $50 billion or more in assets would be charged. However, a Joint Committee on Taxation report suggested several alternatives, including a fee based on income, excess profits, level of risk, or how much TARP money the company took ... * WASHINGTON (4/21/10)--Senate Banking Committee Chairman Christopher Dodd (D-Conn.) and several other Democrats said Monday they might be open to elimination a proposed $50 billion resolution fund for systemically significant institutions. Republicans have used the proposal to argue that the bill would perpetuate more taxpayer bailouts. The provision would require banks with more than $50 billion in assets to create a fund that would help unwind a systemically significant institution if it failed. The Federal Deposit Insurance Corp. has supported the fund, saying the banking industry should finance its own risk (American Banker April 20). Dodd said he was hopeful some Republicans would support the bill. Sen. Olympia Snowe (R-Maine) said she would support it if changes are made, including removing the $50 billion find and loopholes that would allow regulators to save an institution. Sen. Susan Collins (R-Maine) said a bipartisan bill could be possible if Republicans had several more weeks to talk about. Collins said removing the $50 billion fund would relieve some of her concerns. She suggested more explicit capital requirements in the legislation so financial institutions don’t get too large ...

Mica thanks legislators for backing fin lit resolution

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WASHINGTON (4/21/10)--The House on Tuesday endorsed H. Res. 1257, a resolution that supports the goals and ideals of Financial Literacy Month, which takes place during April. H. Res. 1257 also contains specific language that backs credit union involvement in National Credit Union Youth Week, which supports increased financial savings by minors. National Credit Union Youth Week concludes on April 25. In a Monday letter, Credit Union National Association President/CEO Dan Mica thanked Reps. Rubén Hinojosa (D-Texas) and Judy Biggert (R-Ill.) for introducing H. Res. 1257. In that letter, Mica said that financial literacy is “vital to the well-being of American families and the overall economic health and prosperity of our nation” and, “given the uncertainty in today’s financial markets… is more important than ever for all Americans.” Mica also detailed many of the financial literacy endeavors that credit unions take part in during the rest of the year, including direct assistance to the National Endowment for Financial Education’s High School Financial Planning Program as it delivers educational materials to over 500,000 students nationwide and funding of the BizKid$ Television Series, a series that promotes financial education for middle and high school students and reaches more than 1,000,000 households per episode. For the full letter, use the resource link.