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Next step for McWatters: Senate vote

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WASHINGTON (4/30/14)--J. Mark McWatters' nomination to join the National Credit Union Administration board cleared another hurdle on Tuesday, moving on to face a full U.S. Senate vote.
 
The Senate Banking Committee approved McWatters' nomination Tuesday morning alongside Federal Reserve and Department of Housing and Urban Development nominees.
 
"The next step for this package of nominees will be the Senate floor; the timing of that will depend largely on the agreement that the leadership works out to bring nominees to the floor," Credit Union National Association Senior Vice President of Legislative Affairs Ryan Donovan said.
 
If fully confirmed by the Senate, as expected, McWatters will join NCUA Chairman Debbie Matz and board member Rick Metsger to fill out the three-member board.
 
McWatters was nominated in December to fill Republican Michael Fryzel's spot on the NCUA board. Fryzel has been serving since July 2008, and his term officially ended Aug. 2.
 
During his March nomination hearing before the Senate Banking Committee, McWatters said he intends to work with NCUA board members, agency staff and external stakeholders "in an open and respectful manner, with the goal of finding a common ground and working cooperatively through any differences."
 
He said that is the approach that has served him well in past positions, which include service on the TARP Congressional Oversight Panel, and as counsel for Rep. Jeb Hensarling (R-Texas), who is chairman of the House Financial Services Committee, and in his current position as assistant dean for graduate programs at Southern Methodist University's School of Law in Dallas.
 
Also approved by the committee were the nominations of Stanley Fischer to be a member and vice chairman of the Federal Reserve Board of Governors; Jerome Powell to be a member of the Federal Reserve Board of Governors; Lael Brainard to be a member of the Federal Reserve Board of Governors; and Gustavo Velasquez Aguilar to be an assistant secretary of the Housing and Urban Development.

SF Chronicle supports Calif., Nev. league's fight vs. patent 'trolls'

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ONTARIO, Calif. (4/30/14)--The San Francisco Chronicle's editorial page lauded the position taken against so-called patent "trolls" by the California and Nevada Credit Union Leagues--a timely note given the Senate Judiciary Committee is scheduled to vote Thursday on its Patent Transparency and Improvements Act (S. 1720).
 
The Chronicle's April 25 editorial cited President/CEO Diana Dyskstra regarding the effect patent "trolls," who manipulate the patent system for their own gain, have had on credit unions.
 
"Eight of our members were hit by a troll about an element of software in their home-banking systems that the troll said was based on a 1984 patent," Dysktra noted in the editorial. "We've had credit unions that were sent letters demanding thousands of dollars for having ATMs."
 
Jeremy Empol, the leagues' vice president of federal government affairs, said, "As the bill is set for a mark-up in the days ahead, credit unions are well-positioned. The support from the San Francisco Chronicle is extremely helpful, especially as this legislation has large impacts on the technology sector, in addition to banking" (In the News April 28).
 
The paper urged the Senate to pass the bill as soon as possible.

Housing reform markup delayed by committee

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WASHINGTON (4/30/14)--An expected Tuesday markup of housing finance market reform legislation has been postponed to allow Senate Banking Committee members more time to consider the issue.
 
"As all of the Members already know, there continue to be important discussions to build a larger coalition supporting the bill. While we have the votes to report the bill out today, Members of the Committee have asked for a brief delay to try to work out additional issues prior to a final vote," Committee Chairman Tim Johnson (D-S.D.) said on Tuesday.
 
Credit Union National Association Senior Vice President of Legislative Affairs Ryan Donovan said the delay is likely "about trying to find additional votes to get the bill out of committee with a strong vote."
 
The committee will reconvene to discuss the bill in the coming days, Johnson said. Whether this brief delay bodes well for the bill depends largely on whether the sponsors are able to cobble together the three or four votes that they would like to get, and how quickly they are able to do that, Donovan said.
 
In the meantime, CUNA is monitoring the situation and trying to improve areas of the bill where there are still outstanding issues.
 
The 425-page bill, known as the Housing Finance Reform and Taxpayer Protection Act of 2014 (S. 1217), would overhaul the housing finance market and address the issues created by the current government ownership of Fannie Mae and Freddie Mac.
 
The bill ensures that credit unions and community banks, "experts at meeting the financial needs of our communities, have clear and competitive access in the new system," ranking committee member and bill co-sponsor Mike Crapo (R-Idaho) said Tuesday.
 
CUNA has advocated for credit union priorities on several fronts, including meetings with White House officials, Federal Housing Finance Agency Director Mel Watt and members of Congress. In these meetings, CUNA has encouraged policymakers to be mindful of the existing regulatory burdens of credit unions and other mortgage servicers, and to avoid layering additional regulatory authority on top of existing regulatory regimes that address mortgage servicing.

CUNA, NCUF letter cites CU strength in fin. lit.

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WASHINGTON (4/30/14)--"America's credit unions are committed to continuing to work to ensure that consumers of all ages understand how to responsibly manage their finances, and recognize that financial education needs to begin at a very early age," the Credit Union National Association and National Credit Union Foundation wrote in a Tuesday letter to House Financial Services subcommittee on financial institutions and consumer credit members.
 
The letter was sent as a statement for the record for today's subcommittee hearing titled "Examining How Technology Can Promote Consumer Financial Literacy."
 
In the letter, CUNA and NCUF noted that credit unions change lives each day through the "People Helping People" philosophy that drives the credit union movement, investing millions of dollars in consumer financial education and counseling programs.
 
Items highlighted in the letter include:
  • CUNA's work with state credit union leagues and associations to develop a consumer-focused website, asmarterchoice.org, to help consumers understand why credit unions are a smarter way to use financial services and connect them with local credit unions they can join; 
     
  • NCUF programs and grants that provide widespread financial education, create greater access to affordable financial services and empower credit union members to build assets; and
     
  • NCUF efforts to provide funding and promotion of financial literacy tools and education through credit unions across the nation.
These sorts of efforts have helped the credit union system provide financial counseling to more than 1.6 million consumers a year and make nearly 24,000 annual educational presentations to more than 600,000 students, according to the NCUF's 2012 study, "Credit Unions: Focused on Financial Capability across the Nation."
 
"Against a fragmented landscape where each credit provider is seeking maximum gain, not-for-profit credit unions continue to be true to their mission of serving as trusted advisers to their members and communities," the letter said.
 
For the full letter, use the resource link.

GAO: Foreclosure errors may have been even higher

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WASHINGTON (4/30/14)--Federal regulators used incomplete data when they calculated a $9 billion mortgage settlement that replaced the Independent Foreclosure Review (IFR) process, the U.S. Government Accountability Office said in a report issued this month.
 
The IFR process started in 2011 as part of consent orders issued against 14 top mortgage servicers. The foreclosure review process was meant to provide foreclosed borrowers with an opportunity to have their cases reviewed for errors and misrepresentations on the part of servicers. Restitution was also a possibility for some foreclosed borrowers.
 
The Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board in early 2013 announced that the IFR process would instead be replaced with a tentative $9.3 billion settlement. The settlement would allow all IFR-eligible borrowers "to receive compensation significantly more quickly," the OCC said in a release.
 
The incomplete nature of the reviews that those agencies examined in December 2012 limited the extent to which regulators could estimate the potential harm done to mortgage holders, and any potential remediation they were due, the GAO said.
 
Overall, the GAO said the report addresses:
 
  • Factors considered during cash payment negotiations between regulators and servicers and regulators' goals for the payments;
     
  • The objectives of foreclosure prevention actions and how well regulators designed and are overseeing those actions to achieve objectives; and
     
  • Regulators' actions to share information from the file review and amended consent order processes and transparency of the processes.
The GAO also said that federal regulators risk reducing public confidence in the mortgage market if they do not make information on similar review processes more broadly available in the future.
 
In the review, the GAO recommends that the OCC and the Fed:
  • Define testing activities to oversee foreclosure prevention principles and include information on processes in public documents;
     
  • Direct examination teams to take additional steps to evaluate and test servicers' implementation of established foreclosure prevention principles;
     
  • Evaluate and test servicers' implementation of foreclosure prevention principles; and
     
  • Include information on the processes used to determine cash payment amounts, such as the criteria servicers use to place borrowers in various payment categories, in future reports or other public documents.
For the full GAO report, use the resource link.

CU tax status target of ICBA Hill visits

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WASHINGTON (4/30/14)--Bankers have not given up on the credit union tax status, as the Independent Community Bankers of America has highlighted opposition to the credit union tax status as a key issue for its annual Washington Policy Summit.
 
In a release, the ICBA urged summit attendees to encourage members of the U.S. Congress to review the credit union tax status. The ICBA also called on banks to oppose expanded powers for credit unions, "particularly a proposal to raise the cap on credit union business lending."
 
The ICBA event, which has around 1,000 attendees, ends Thursday.
 
"The bankers are a bit late to the party," said Bill Cheney, Credit Union National Association president/CEO. "In February, the House Ways and Means Committee--with its tax reform proposal--made no changes to our tax exemption, and have signaled no willingness to change that stance."
 
He added, "But the bankers are tenacious--and that should be a sign to all credit unions to keep telling their lawmakers 'don't tax my credit union.'"
 
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, CUNA reminds. These 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.
 
Credit unions also have a moderating influence on bank pricing, by raising bank deposit interest rates and lowering bank loan rates. 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.