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CUNA seeks Congress' thorough exam of NCUA RBC plan

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WASHINGTON (4/7/14)--Congress should thoroughly examine the National Credit Union Administration's proposed risk-based capital rule and direct the agency to make significant changes to address serious deficiencies in the regulation, the Credit Union National Association said in a letter to House Financial Services Committee leaders.

The letter was sent to Committee Chairman Jeb Hensarling (R-Texas) and Ranking Member Maxine Waters (D-Calif.) ahead of a planned Tuesday hearing on regulatory red tape. General counsels from federal financial institution regulatory agencies, including the NCUA and Consumer Financial Protection Bureau, are expected to speak during that hearing. 

Concerns raised in the letter to Congress include: 
  • The rule is fundamentally flawed. For example, it would increase by $7.3 billion the amount of capital credit unions would be required to hold to be "well capitalized" through the imposition of asset risk-weightings that are poorly calibrated--and, in some cases, more stringent than what banks face under Basel III;
  • Because of the poorly designed risk-weights, the proposed rule would have a significant, adverse impact on credit unions' ability to serve their members, particularly through mortgage lending and small business loans; and
  • The time period for implementation is unreasonably short at 18 months.
CUNA in the letter also commented on recent CFPB rules, noting that that agency in every case should target the bad actors in the financial services market, not force out the good actors. Credit unions should be exempted from CFPB rulemakings, unless there is a record of abusive practices by credit unions on the issue being addressed, CUNA has repeatedly emphasized. 

Credit unions can comment on the NCUA's proposed risk-based capital rule until May 28. CUNA has developed resources to help credit unions develop and file their letters.

For more resources, use the link.

Million$ have been raised for sick kids through CU Run

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WASHINGTON (4/7/14)--It may have been called the Credit Union 'Almost-Cherry Blossom' Run by one announcer, but the
Click to view larger image Both the Men's and Women's USA 10-Mile Championships presented by America's Credit Unions were held in conjunction with the 42nd Credit Union Cherry Blossom 10-Mile Run Sunday. Mamitu Daska (not shown) of Ethiopia won the Women's race and Kenyan Stephen Sambu (not shown) won the Men's. However, the particpipants pictured above appear to have won a whole lot of good feelings with their finishes. (CUNA Photo)
late blooming of Washington's glorious Japanese Cherry Trees didn't dampen the enthusiasm of the 15,000 runners who signed on to help raise almost a half-million dollars for Children's Miracle Network Hospitals (CMNH) Sunday.

A record number of members of Congress became honorary race chairs of the event this year--231 representing all 50 states. Capitol Hill staffers also are present among participants in the race, which was awarded most popular D.C. race by readers of Washingtonian magazine last year.

Overheard conversations between runners reported near-ideal race conditions.  There was just a bit of a headwind in a final leg of the course, which winds its way along national monuments and the landmark Tidal Basin.

Also arriving with much spirit were the many credit union volunteers. They hit the National Mall in chilly pre-dawn hours to back the runners by setting up support stations, and stayed through a beautiful sunrise and during the festive after-race activities.

The volunteers, like the Credit Union National Association's faithful crew at the baggage check-in tent, helped stow the
Click to view larger image For the 13th consecutive year, CUNA volunteers helped to tag, stow, secure and then return the thousands and thousands of bags of runners' personal belongings. (CUNA Photo)
personal belongings of the racers, helped organize thousands of bananas for post-race distribution, pointed the way to the right starting spots at the right time, handed out space blankets to each finisher, and lined up medals and awards to recognize achievements, among other support activities.

Credit Union Miracle Day became the title sponsor group of the now 42-year-old race in 2002 and will remain so through 2016. The effort is a collaboration of 101 credit unions and 48 business partners and credit union service organizations, including lead partner PSCU.

CUMD's 2014 donation of $487,000 will bring the 13-year total of funds donated to Children's Miracle Network Hospitals nationwide to well-over $6 million. Approximately $102,000 of the total was raised by runners and their families and friends alone.

Children's Miracle Network Hospitals are an alliance of premier children's hospitals that treat 10 million critically ill children each year, regardless of their ability to pay.

The donations are made under the umbrella of Credit Unions for Kids, one of the top three corporate contributors to Children's' Miracle Network nationwide.

The race, as always, boasted a star-studded field. It included defending champion Janet Bawcom, who broke a record and finished second, U.S. Olympians Jen Rhines and Blake Russell, Sara Hall and Lindsey Scherf on the women's side. Participating in the men's field were Matt Tegenkamp, Mo Trafeh--winner of the Half Marathon and 25K USA Championships in 2013--Christo Landry and Matt Llano.

The runners competed for a total of $81,800 in prize money, the largest amount awarded at the race to date.

Also on Sunday, the third annual Credit Union SacTown Ten-Mile Run took place at the State Capitol in Sacramento, Calif. Nearly 2,000 participants signed on for the event which features a 10-mile race, a three-person relay and a kids' Miracle Mile.

The 2014 Run serves as the Pacific Association 10-Mile Championship, Parties interested in the credit union fundraising effort can use the resource link below to make a contribution.

CFPB addresses reg implementation criticisms

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WASHINGTON (4/7/14)--The Consumer Financial Protection Bureau seems to have gone on the defensive last week regarding regulatory burden as its director, Richard Cordray, told a lawyers' group that his agency is "very committed to developing sensible and workable solutions" to regulatory implementation issues.

Cordray made his remarks before the American Bar Association.

Cordray emphasized that the CFPB's rulemaking process "does not end with finalizing a set of rules."

"It is not good enough for us to take the view that once new rules are published, our work is done and we can say to financial institutions that 'it is your problem now,'" he said.

"If the point of our regulations is to protect consumers and to promote fair, transparent, and competitive markets, then we should care a great deal about how well the rules are implemented," he added. 

Cordray noted that the many operational and compliance changes that a regulatory change can prompt pose interesting problems that "may not be fully understood until the process is under way and the problems are confronted directly."

It can also be difficult for financial institutions and others to gauge the appropriate length of the implementation period for a given rule or set of rules, he added.  

Cordray said it is unclear how best to resolve these regulatory dilemmas, but noted the agency is very committed to developing sensible and workable solutions.

"We will continue to learn more about these issues by deepening our outreach to vendors and taking other steps to set appropriate implementation periods," he said. 

See resource link for more.

NCUA letter warns, advises about taxi-medallion lending

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ALEXANDRIA, Va. (4/7/14)--Credit unions that make taxi-medallion secured loans, participate in those loans or are contemplating doing so should review new agency guidance on the topic.

The National Credit Union Administration noted in a Letter to Credit Unions (14-CU-06) sent last week that taxi-medallion lending is a valuable form of member business  lending when provided by certain credit unions with proper expertise, but warned that it entails some "unique risks."

The medallions are symbols that usually are attached to the hood of city cabs. The medallions are licenses that are regulated by the city and allow drivers to pick up curbside passengers who hail a cab.

The NCUA letter said that market forces have led to an increase in medallion values in several major metropolitan markets. "As a result, credit unions that offer or participate in these loans can be exposed to increased risk," NCUA Chairman Debbie Matz said. 

The agency also has released a supervisory letter to ensure examiners take a consistent approach to supervising credit unions engaged in taxi-medallion lending. The guidance also provides information that will help credit unions manage the unique risks associated with the loans. 

For the full NCUA letter, use the resource link.

March NCUA meeting now available online

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ALEXANDRIA, Va. (4/7/14)--If you missed the March 20 National Credit Union Administration open meeting, you can now go online and hear and see all that went on.
 
The March agenda included two items: 
  • A proposed interagency rule on minimum requirements for appraisal management companies; and
  • The Temporary Corporate Credit Union Stabilization Fund quarterly report. 
The NCUA started posting recorded versions of its monthly open meetings in April 2013. The agency says the practice is part of its ongoing efforts to provide transparency--and to give those unable to attend a board meetings the opportunity to become better informed about agency actions.
 
It takes a little while to get the videos up on the website, the agency has explained, so the posting is accessible to the hearing and visually impaired.
 
Use the resource link to access the archived meetings.
 
 

NCUA CU leadership boot camp registration open

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ALEXANDRIA, Va. (4/7/14)--Credit union managers and board directors interested in signing up for an April 12 Leadership Boot Camp still have time to do so.
 
The leadership-training session is hosted by the National Credit Union Administration's Office of Small Credit Union Initiatives (OSCUI) and will be held at the Sheraton Baltimore City Center Hotel.
 
Click to view larger image Click for larger view
Staff from OSCUI, CUNA Mutual Group and the Maryland-District of Columbia Credit Union Association will make presentations. Topics to be covered include:
  • Supervisory committee--your internal audit team;
  • Bank Secrecy Act;
  • Employment practice from CUNA Mutual Group;
  • Succession planning and passing on the baton;
  • Revisiting the allowance for loan and lease losses account;
  • Board governance; and
  • Communications for credit union management.
Started just last year as CEO Boot Camps to focus training on credit union managers and those new to credit union management, this year OSCUI will offer 10 of the expanded leadership sessions.
 
OSCUI offers free training to credit unions regardless of asset size.

Use the resource link to register for the Baltimore boot camp or to view a list of all OSCUI training programs for 2014.