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CUNA Says Relief Bill Is Good As First Step

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WASHINGTON (4/29/13)--Credit Union National Association President/CEO Bill Cheney Friday commended Rep. Blaine Luetkemeyer (R-Mo.) for introducing legislation that would address several regulatory burdens facing credit unions and community banks.

"This legislation is a good first step toward providing regulatory relief, but it can only be viewed as a first step," Cheney said Thursday night when the bill was introduced. "More will need to be done to address the cumulative effect of regulatory changes that continue to challenge credit unions."

In a letter of thanks to Luetkemeyer for taking this step, Cheney reminded, "It is not just one new law or revised regulation that challenges credit unions but the cumulative effect of regulatory changes," a phenomenon that has been "building for over a decade."

The Luetkemeyer bill, called the "Community Lending Enhancement and Regulatory Relief Act (CLEAR Relief Act)," would aid community-based financial institutions--both credit unions and community banks--by:
  • Providing regulatory relief in the mortgage area; and
  • Eliminating a requirement that privacy notices be sent on an annual basis.
The CLEAR Relief Act would also eliminate a requirement that financial institutions verify that automated clearing house payments are not a prohibited transaction, if the financial institutions originating the transaction has warranted that they have complied with Office of Foreign Assets Control regulations.

"Your legislation would address several regulatory burdens facing credit unions and community banks, and we commend you for seeking common ground on regulatory relief legislation. It is important to recognize, however, that much more needs to be done to address the crisis of creeping complexity, and we look forward to continuing to work with you to that end," Cheney concluded.

Youth Fin Lit Efforts To Be CFPB Session Focus

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WASHINGTON (4/29/13)--Credit Union National Association Assistant General Counsel Luke Martone will be among the invited attendees at the Consumer Financial Protection Bureau's Youth Financial Education all-day session on April 30.

The event, "Investing in our Future: A National Conference on Financial Capability for Children and Youth," will be hosted by the CFPB's Office of Financial Education.

"The Conference will highlight promising practices, critical challenges, and opportunities in promoting the financial capability of children and youth populations," the CFPB said in a release. Public, private, and nonprofit representatives have been invited to attend the event.

Topics on the agenda include:
  • Integrating financial education in K-12 schools;
  • The role of innovation and hands-on learning in promoting financial capability of children and youth; and
  • Critical research and evaluation needs for making the policy case for school based financial capability initiatives.

CFPB Issues Financial Civil Penalty Fund Rule

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WASHINGTON (4/29/13)--The Consumer Financial Protection Bureau Friday proposed a rule to establish a "Consumer Financial Civil Penalty Fund," which was created under the Dodd-Frank Wall Street Reform Act.

The proposal, in effect, would lay out procedures for allocating funds the bureau collects as fines from financial institutions for faulty products or services to consumers who were harmed by them. It also interprets what kinds of payments to victims are appropriate.

To the extent that such victims cannot be located or "such payments are otherwise not practicable," the rule would allow the CFPB to use the civil penalty funds for consumer education and financial literacy programs. However, the proposal notes that, in the future, the bureau may limit the amount of funds that the fund administrator may allocate to consumer education and financial literacy programs.

Also under the proposed rule, the administrator would allocate funds from the Civil Penalty Fund on a six-month schedule.

Use the resource link to access the CFPB proposal document.

Jump$tart, CUNA Join Hill Fin Lit Fest

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WASHINGTON (4/29/13)--Rep. Ruben Hinojosa (D-Texas) highlighted his Deep South Texas Financial Literacy Alliance, which seeks to increase understanding of key financial concepts with the help of credit unions and others, during Friday's Financial Literacy Day on Capitol Hill.

CUNA staff promote aSmarterChoice at Friday's Capitol Hill event. (CUNA Photo)
The congressman also urged legislators at the event to join his Financial and Economic Literacy Caucus. He was one of 12 members when the group began. He said he hopes to increase membership to 100 legislators soon.

The Jump$tart Coalition for Financial Literacy, the Credit Union National Association and other partners held the event to update members of Congress and their staff on the many financial literacy projects of government, nonprofit and corporate organizations. This is the 11th year the event has been hosted on Capitol Hill.

Rep. Terri Sewell (D-Ala.) also spoke during the event. U.S. House staffers, the National Credit Union Administration, other financial regulators and Washington financial services groups also took part in the day's festivities.

CUNA staff distributed financial literacy materials and promoted aSmarterChoice.org during the event. Users can read basic information on key credit union concepts and find a local credit union they can join through that site.

For more on aSmarterChoice.org, use the resource link.

Cheney Report: Wash CUs Unite For Good Of Members

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WASHINGTON (4/29/13)--Three Washington state credit unions--Peninsula CU, Connection CU and Kitsap CU--recently united for the good of their members, and their efforts are lauded in this week's edition of The Cheney Report.

These three credit unions are among many that have reached out to help their members deal with the impact of the federal sequester. Elliot Gregg, president/CEO of Kitsap CU, said the three credit unions met to discuss "how to proactively help our members through the impact of financial change."

Peninsula has made contact information for local utility companies, financial counseling services, and community resource providers available on its homepage. In the April edition of Kitsap CU's newsletter, Gregg encouraged members that have newfound financial concerns due to the sequester to have an open dialogue with his credit union. That type of action will "go a long way in creating a positive course of action," Gregg said.

These collaborative effort resulted in positive press coverage and CUNA's Unite for Good vision. "It's only been a few months since we launched our vision of "Americans Choose Credit Unions as their Best Financial Partner," and examples like in Washington State are evidence that credit unions are ready to "Unite for Good" to achieve that vision, Cheney wrote.

This week's Cheney Report also includes:

  • Member business lending and tax reform news;
  • CUNA capital standards advocacy;
  • Details on a Consumer Financial Protection Bureau report on payday lending; and
  • News on credit union Financial Literacy Month activities.

Each Friday, The Cheney Report delivers Cheney's insights on three to four key events and policy developments affecting credit unions into the e-mail inboxes of credit union CEOs. The report also provides a valuable window into CUNA's actions on behalf of member credit unions and reinforces the value of CUNA membership, CUNA Executive Vice President of Strategic Communications Paul Gentile notes.

To sign up for The Cheney Report, click the resource link below and use the "subscribe" tab on the right of the page.

Past issues of The Cheney Report are also archived on cuna.org.

NCUA Notes FSOC Recommendations That Affect CUs

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ALEXANDRIA, Va. (4/29/13)--The Financial Stability Oversight Council's 2013 Annual Report, released late last week, features three regulatory recommendations credit unions should be aware of, National Credit Union Administration Chair Debbie Matz said Friday.

"As the supervisor and insurer of the credit union system, NCUA takes these recommendations and the analysis of emerging risks very seriously. A number of the risks identified and recommendations are consistent with our regulatory and supervisory priorities, and the report reinforces and reaffirms the critical nature of these priorities," Matz added.

The FSOC report:

  • Recommends that regulatory agencies continue their scrutiny of how potential changes in interest rates could adversely affect risk profiles;
  • Emphasizes that capital and liquidity buffers form the most fundamental protection for the broader financial system; and
  • Notes that operational risks, including cyber-security risks, are an emerging and rapidly changing threat.
For the full NCUA release, use the resource link.

The Credit Union National Association is reviewing this report and will be following up with NCUA to further spotlight credit unions efforts in these areas. "To the second point, the ability of credit unions to have access to supplementary capital, which NCUA supports, would provide additional protection to credit unions and the National Credit Union Share Insurance Fund," CUNA Deputy General Counsel Mary Dunn said.

$80K For LICU Summer Interns To Be Provided By NCUA

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WASHINGTON (4/29/13)--Up to $80,000 in funds will be made available to successful credit union applicants through the 2013 round of the National Credit Union Administration's Student Internship Grant Initiative.

The agency program provides individual grants of up to $4,000 to help eligible credit unions hire student interns during the summer months. Program funding is provided through the Community Development Revolving Loan Fund.

"The Student Internship Grant Initiative provides the next generation with the opportunity to gain professional experience, enhance job skills, and learn more about the credit union industry," NCUA Board Chair Debbie Matz said. "Additionally, this initiative allows low-income credit unions to find and groom the industry's future leaders. The infusion of new and diverse talent will assist credit unions to continue to improve their member services," she added.

Only low-income designated, financially viable credit unions may take part in the grant program. The grants can only be used for student internship costs, the NCUA said. Further, credit unions that received grants in 2012 may not reapply in 2013. A combined $106,000 was awarded to 24 credit unions during the 2012 round of the program.

Applications will be accepted between May 1 and 20. The NCUA's Office of Small Credit Union Initiatives will approve applications on a first-come, first-served basis. Funding awards will be announced in mid-June, the NCUA said.

To apply for the grant program, use the resource link.

Additional grant initiatives for 2013 will be announced in mid-June, the NCUA said.