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CUNA To Meet On CU Tax Status With Ways And Means Working Group

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WASHINGTON (4/9/13)--The House Ways and Means Committee has asked the Credit Union National Association and other stakeholders to brief the panel's financial services tax reform working group on the public policy reasons backing the credit union federal tax exemption.

"Credit unions have a good story to tell and we look forward to sharing it again with the tax policymakers," said CUNA Senior Vice President of Legislative Affairs Ryan Donovan Monday.

Donovan reiterated that no legislator CUNA has spoken with has suggested that credit union taxation is on the table as a tax reform or spending issue. However, he added, none have suggested that CUNA should be anything but vigilant on this key issue as tax reform talks move forward and all sorts of ideas are thrown into the discussions.

"We do know an educated Congress, and public, are the best ways to preserve credit unions' tax exemption. We continue with that process on both fronts," Donovan said, adding, for instance, that CUNA lobbyists and President/CEO Bill Cheney met last month with Rep. Adrian Smith (R-Neb.), chairman of the Ways and Means Committee's financial services tax reform working group.

"Credit unions are exempt from federal income tax because they are not-for-profit financial cooperatives with a mission of providing access to credit and promoting thrift to their members," Donovan said, adding that consumers benefit to the tune of $8 billion annually in terms of lower rates on loans, lower fees on services, and higher returns on deposits. 

Non-members benefit as well because credit union competition helps keep bank savings rates higher and loan prices lower, he reminded.

Preserving the credit union tax status remains CUNA's top legislative priority, and CUNA has emphasized that credit unions must work collaboratively to communicate the importance of that status to their members.

CUNA's has designed a members-only toolkit to help credit unions connect with their members and educate the public about credit unions. The tax toolkit webpage features free materials in the form of radio ads, print ads, newsletter articles, state-level updates, materials to use in advocacy efforts with federal and state lawmakers, and much more.

CUNA research has shown that when credit union members understand the value of membership, they will work with credit unions to defend their tax status.

For more on CUNA's tax toolkit, use the resource link.

Extensive CUNA Reg Reform List To Be Offered Wednesday

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WASHINGTON (4/9/13)--Credit Union National Association witness Pamela Stephens will target the "crisis of complexity" that burdensome regulations have created for credit unions and offer an extensive list of CUNA-backed reforms during Wednesday's House Financial Services subcommittee on financial institutions and consumer credit.

Stephens, who is CEO of $55-million-in-assets Security One FCU, Arlington, Texas, will note that this increased complexity has disproportionately impacted small credit unions.

Removing legislative and regulatory barriers is one of the key objectives outlined in CUNA's Unite for Good initiative. Unite for Good calls on credit unions to rally in support of a common vision where "Americans choose credit unions as their best financial partner." For a full list of Unite for Good action steps, use the resource link.

Amendments to the Federal Credit Union Act's supplemental capital and member business lending regulations will be on the CUNA agenda for Wednesday's hearing. Specific concerns regarding Consumer Financial Protection Bureau, National Credit Union Administration and Financial Accounting Standards Board projects and their impact on credit unions will also be discussed by the CUNA witness.

Stephens will also focus on additional changes that would help credit unions better serve their members, including:

  • Adjusting the treatment of non-owner occupied one- to four-family dwelling loans for credit unions from business loans to residential real estate loans;
  • Addressing the treatment of prepaid debit accounts under the National Credit Union Share Insurance Fund;
  • Pursuing examination fairness legislation;
  • Examining Regulation D and the treatment of automatic transfers from savings to checking accounts;
  • Reducing loan loss reserve requirements on U.S. Small Business Administration microloan programs;
  • Ensuring that credit unions are able to maintain their current membership base, and add to that base, when they pursue mergers; and
  • Allowing privately insured credit unions to join the Federal Home Loan Bank.

The CUNA witness will also encourage the NCUA and CFPB to work more closely together to help ensure that credit union issues are more fully understood and addressed as new CFPB regulations are developed.

The hearing is scheduled to begin at 2 p.m. (ET). Also scheduled to testify are:

  • Melrose CU General Counsel Mitchell Reiver, who will testify on behalf of his $1.6 billion-in-assets, Briarwood, N.Y. credit union; and
  • Robert Burrow, president/CEO of Bayer Heritage FCU, Proctor, W. Va., who will testify on behalf of his 28,000 member, $309 million-in-assets credit union and the National Association of Federal Credit Unions.

Regulatory relief has been a theme for the House Financial Services Committee early this year, and CUNA believes Wednesday's hearing could be an early step in the development of regulatory relief legislation. (See related News Now story: April 10 Hearing Could Lead To Reg Relief Rewards.)

April 10 Hearing Could Lead To Reg Relief Rewards

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WASHINGTON (4/9/13)--Credit unions could ultimately reap regulatory relief as a result of Wednesday's House Financial Services subcommittee on financial institutions and consumer credit hearing, John Magill, executive vice president of government affairs for the Credit Union National Association, said on Monday.

The Wednesday hearing, which is scheduled to begin at 2 p.m. (ET), shows that lawmakers have heard the pleas of credit unions and other community-based financial institutions and are preparing to act to address these needs, CUNA Senior Vice President of Legislative Affairs Ryan Donovan added.

The credit union regulatory relief hearing is one way that House Financial Services Committee members are soliciting ideas for legislation they feel they could move through the House, he said. CUNA's witness, Pamela Stephens, will present a full slate of CUNA-backed regulatory changes that legislators could act on to aid credit unions. (See related News Now story: Extensive CUNA Reg Reform List To Be Offered Wednesday.)  Stephens is the CEO of Security One FCU, Arlington, Texas.

The House could use these and other credit union regulatory relief measures as part of a smaller legislative package, or could compile a larger bill full of credit union and bank regulatory relief provisions, Donovan said.

"Right now, we are getting the ideas out on the table. Ours not an exhaustive list, but it's a start, and we're grateful that the committee is engaging in this process.

"We will support any of these concepts that make it into the Senate," Donovan added.

Donovan said Senate Banking Committee members have also indicated they are open to reducing regulatory burdens for credit unions. However, Donovan noted, they have not yet this year developed as formal of a process as the House committee, where regulatory relief and reducing regulatory burden have been areas of emphasis for new House Financial Services Chairman Jeb Hensarling (R-Texas).

CUNA is talking with bank representatives to stake out common ground on regulatory issues, and has also spoken with the NCUA on aspects of this week's testimony.

Overall, Magill said, the U.S. Congress likely wants to "get something done" and pass things of this nature to help their constituents.

Other hearings this week of credit union interest include two on Wednesday:

  • A House Financial Services subcommittee hearing on sustainable housing finance; and
  • A House Appropriations subcommittee on financial services and general government hearing on Small Business Administration oversight.
The House Thursday hearing schedule includes:
  • A House Financial Services subcommittee hearing on the International Monetary Fund;
  • Separate House Ways and Means Committee and Senate Finance Committee hearings on President Barack Obama's 2014 budget; and
  • A House Financial Services subcommittee on capital markets hearing on derivatives.

CFPB, NCUA Action Detailed In CUNA Reg Advocacy Report

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WASHINGTON (4/9/13)--Credit Union National Association analysis of recent releases from the National Credit Union Administration and the Consumer Financial Protection Bureau are among the topics featured in this week's edition of the Regulatory Advocacy Report.

Issues addressed in CUNA's weekly members-only publication on regulatory developments include:

  • An NCUA legal opinion letter on the use of mail ballots in connection with special credit union board meetings;
  • The NCUA Office of Minority and Women Inclusion's report on agency efforts to enhance workforce diversity;
  • Credit Union National Association comments on the Electronic Payments Association's (NACHA) latest compliance and operational topics proposal;
  • The CFPB's move to begin accepting consumer complaints on international remittance transfers and other money transfers; and
  • NCUA guidance on Loan Workout Policies and Reporting of Troubled Debt Restructurings.
An updated chart on the CFPB's proposed and final rules is also included in the report.

To read the full report, employees or volunteers of CUNA and state credit union league member credit unions can sign up below to receive the Regulatory Advocacy Report.

The Regulatory Advocacy Report is archived on