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New Hampshire CU exec gets Presidents award

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ALEXANDRIA, Va. (4/25/08)--Gordon Simmons, president/CEO of Service CU, Portsmouth, N.H., received the President’s Volunteer Service Award from National Credit Union Administration Chairman JoAnn Johnson this week. The award was presented to Simmons during Johnson’s remarks to the 36th Annual Defense Credit Union Council’s (DCUC) Overseas Subcouncil Meeting in Edinburgh, Scotland. Johnson also used the forum to commend credit unions for dedicated service to the nation’s military personnel and their families, and highlighted their efforts to enhance financial literacy. Those efforts, the chairman said, help prevent predatory lending. In that framework, Johnson recognized the volunteer efforts of Simmons, particularly those targeted at improving financial literacy among military personnel and students. “Whether it's by the development and leadership of the ‘CU Reality Fair’ through his service as chairman of the board of America’s CU Museum, which provides young consumers with financial education tools and resources to make better choices for the rest of their lives, to his tireless devotion to national financial education initiatives that foster better decisions on the part of military servicemembers, Gordon sets a daily example for credit union leaders across the country,” Johnson said. Service CU has more than 108,000 members and serves the residents of New Hampshire and Massachusetts as well as U.S. military personnel and their families around the world. In 2003, President George W. Bush created the President's Volunteer Service Award Program to thank and honor Americans who, by their demonstrated commitment and example, inspire others to engage in volunteer service.

With 149 co-sponsors CUNA urges CURIA advocacy

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WASHINGTON (4/25/08)—Rep. Todd Akin, a Republican from Missouri, signed on this week as the 149th official supporter of the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). Aiken has stood in the corner of credit unions before, perhaps most notably during the 2005 House Ways and Means hearing on the tax-exempt status of credit unions. Aiken wrote to then-Chairman Bill Thomas (R-Calif.): “Taxing credit unions would be a tax on consumers.” He said additional taxes would put the existence of many credit unions “in severe jeopardy,” which in turn would harm “families and consumers” depending on them for financial services. Ryan Donovan, vice president of legislative affairs for the Credit Union National Association (CUNA), Thursday welcomed the addition of Akin’s name to the CURIA co-sponsor list and urged credit unions to continue and increase their work to garner lawmakers’ support for both CURIA and the Credit Union Regulatory Relief Act (CURRA, H.R. 5519). Donovan said it is a critical time for both pieces of legislation with Congress more than halfway through its longest in-session period for the year. "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. “There is no silver bullet—no magic number of co-sponsors—that will ease credit union regulatory improvements into existence. It is an important fight, but a tough fight, and credit unions must keep up their contacts with lawmakers at this critical juncture,” 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.
CURRA is a more narrowly drafted bill, which features three significant provisions that would: allow all federal credit unions to apply to serve underserved areas, exempt member business loans made in underserved areas, and permit federal credit unions to offer payday loans to non-members within their field of membership. CUNA supports the more recently introduced CURRA, but emphasizes that credit unions need additional regulatory relief that includes the provisions in the broader CURIA bill.

CUNA to NCUA No new regulatory burdens

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WASHINGTON (4/25/08)—The Credit Union National Association (CUNA) said it does not support any new regulations suggested by a National Credit Union Administration (NCUA) on credit union corporate governance issues. The NCUA has requested comments on whether new regulations are needed on a range of issues such as mergers, conversions, private insurance and related topics. "This is one of the most significant comment letters CUNA will file this year," said CUNA Deputy General Counsel Mary Dunn. "Comments are not due until April 30 and we encouraged leagues and credit unions to weigh in with NCUA to oppose new regulations as we have done." In January, the NCUA approved an advanced noticed of proposed rulemaking (ANPR) with proposals to amend its 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. In an April 18 comment letter to the agency, CUNA said it feels “very strongly” that credit unions need more regulatory relief, not additional constraints and that agency action on mergers and conversions is unwarranted at this time. CUNA said the proposals would “needlessly intrude in the operations of credit union boards.” Instead, CUNA recommended the NCUA consider “carefully crafted and circumscribed guidance on a very limited number of issues,” such as communications with the members of a target credit union in a “hostile” takeover situation. “We urge NCUA to work with CUNA and the credit union system in the development of such guidelines,” the letter said, adding that CUNA would also like a role in future discussions on whether an appropriate standard could be developed on the scope of fiduciary duties of federal credit union board members. The CUNA letter acknowledged efforts by the NCUA to provide some regulatory relief through its annual review of its regulations and initiatives, and urged the regulator to also review how the examination process could be improved. “Federally insured credit unions are feeling besieged under the regulatory encumbrances they face daily,” CUNA wrote. While not all of the burden is the result of NCUA-driven regulations—Bank Secrecy Act requirements play a huge role—CUNA noted that the NCUA has, in fact, adopted or proposed a number of initiatives in recent months. “Further, credit unions across the country are increasingly raising concern about over-zealous examiners on a number of issues.” CUNA also warned that BSA compliance and negative examiner responses to reasonable efforts to assist members with mortgage workout plans are among the escalating concerns of credit unions. For the complete CUNA comment letter, use the resource link below.

Inside Washington (04/24/2008)

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* WASHINGTON (4/25/08)--Despite a White House veto threat, the House Financial Services Committee continues to work on the markup of a mortgage relief bill that would refinance new guarantees up to $300 billion for subprime loans (CongressDaily PM April 24). Under the bill, lenders would write down mortgages so borrowers could afford them. The lender would then be compensated by a Federal Housing Administration (FHA) loan, without exposing the borrower to any more credit. The markup will continue next week. The bill is expected to be on the House floor during the first full week of May, according to Credit Union National Association Senior Legislative Representative John Hildreth ... * WASHINGTON (4/25/08)--Mainstream capital markets and community development financial institutions (CDFIs) should work together to improve community development loan offerings, Federal Reserve Board Gov. Randall Kroszner said Monday(Market News International April 25). Information about loan products should be improved, and risk and pricing models should be developed. Contracts also should be standardized, he added. CDFIs will have to locate new funding because of tight budgets--but the Community Reinvestment Fund could help, as it has helped create a market for community loans ... * WASHINGTON (4/25/08)--The Office of the Comptroller of the Currency (OCC) published a final rule yesterday to reduce unnecessary regulatory burden, and revise and update various OCC regulations. The rule includes measures that update and revise the qualifying standards and after-the-fact notice procedures that apply to national bank operating subsidiaries. It also expands the list of operating subsidiary activities that are permissible upon filing an after-the-fact notice ...