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CUNA Tax Advocacy Webinar Is Wednesday

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WASHINGTON (5/20/13)--More details of the joint Credit Union National Association/state credit union league "Don't Tax My Credit Union" campaign will be revealed during a free Wednesday webinar.

CUNA President/CEO Bill Cheney will host the webinar, which is scheduled for Wednesday at 3 p.m. ET.

The National Webinar on the Credit Union Tax Status will feature:

  • A legislative briefing on the tax situation facing credit unions; and
  • Valuable information on the tools CUNA and state leagues are providing to help credit unions join the tax status fight.
CUNA and affiliated state credit union leagues last week launched a large-scale, nationwide grassroots-mobilization campaign urging America's 96 million credit union members to deliver a united message to the U.S. Congress: "Don't tax my credit union!"

The campaign is being launched at a time when the U.S. House and Senate have made broad-based tax reform a major priority. The initiative will urge lawmakers as part of any final tax reform plan to preserve the federal tax exemption credit unions receive as not-for-profit, member-owned cooperatives.

"It's rare that credit unions call upon their 96 million members to take action, but our members will be the best spokespeople we have, especially on an issue as vital to our future as this," Cheney said.

To register for the webinar, and learn more about CUNA's and the leagues' "Don't Tax My Credit Union" campaign, use the resource links.

Senate CU MBL Bill Gets CFA Backing

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WASHINGTON (5/20/13)--The Small Business Lending Enhancement Act (S. 968) would "expand access to affordable credit for small businesses and help strengthen local marketplaces that serve consumers well," the Consumer Federation of America (CFA) said in a letter to Sen. Mark Udall (D-Colo.).

S. 968, which was introduced by Udall on Thursday, would increase the credit union member business lending (MBL) cap from 12.25% of assets to 27.5%. The Credit Union National Association has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

CFA Executive Director Stephen Brobeck in the letter said increasing the MBL cap "would be particularly beneficial at this time," and would aid small businesses that "play an essential role in enhancing competition and innovation in local markets."

The CFA letter cited U.S. Department of the Treasury statistics that show 25% of credit union small business loans made in 2001 went to households with less than $30,000 in annual income. Another 20% of those loans went to families with incomes of $30,000 to $50,000, according to the Treasury statistics.

"If given greater small business lending opportunities, they will be able to invest in loans that likely will increase credit union earnings, capital contributions, and overall safety and soundness, directly benefitting all credit union members," Brobeck said.

Udall's bill currently has 14 co-sponsors. Reps. Ed Royce (R-Calif.) and co-sponsor Carolyn McCarthy (D-N.Y.) released similar legislation early this year. That bill, H.R. 688, has 94 co-sponsors.

Cheney Report: CU Tax Efforts Help Other Initiatives

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WASHINGTON (5/20/13)--Ongoing efforts by the Credit Union National Association and state credit union leagues to protect the credit union tax exemption can also help raise the profile of other credit union priorities in the U.S. Congress, CUNA President/CEO Bill Cheney said in this week's edition of The Cheney Report.

CUNA and state leagues last week launched a large-scale grassroots effort which seeks to mobilize America's 96 million credit union members and deliver to Congress a direct, united message: "Don't tax my credit union!"

This Wednesday, May 22, at 3 p.m. ET, CUNA is conducting a free webinar on the new campaign. Cheney urged credit union executives to attend. To sign up for the webinar, click here.

The "Don't Tax My Credit Union" campaign is extremely important, Cheney said. At the same time, it "will not detract from our efforts this year to advance proactive charter enhancement legislation for credit unions, such as supplemental capital and an increase in the member business lending cap.

"We can and will move our proactive agenda forward while undertaking this grassroots tax advocacy campaign. In fact, the grassroots effort on taxation will strengthen us on charter enhancement.

"A large, sustained, high-impact grassroots turnout will create a halo effect on credit union issues that illustrates the depth of consumer support for credit unions. Members of Congress are sure to take notice," the CUNA CEO added.

Asking credit unions to contact their members on an advocacy issue is not something CUNA does often, or takes lightly, Cheney wrote. "But we must act now, and our 96 million members will be our best spokespeople, especially on an issue as vital to the movement's future as our tax status."

CUNA has offered a host of resources to aid credit unions in their outreach efforts, including a tax advocacy kit, a new website,, and new resources to engage consumers through social media, using the Twitter hash tag #DontTaxMyCU and the Twitter handle @CUNAadvocacy.

This week's Cheney Report also includes:
  • The results of last week's National Credit Union Administration board meeting, and the nomination of potential new board member Rick Metsger;
  • Details from CUNA's latest Credit Union Environmental Scan (E-Scan); and
  • A thank you to retiring National Credit Union Foundation Executive Director Wendell "Bucky" Sebastian.
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.

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

Escrow Tweaks, Exemption Areas Finalized By CFPB

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WASHINGTON (5/20/13)--The Consumer Financial Protection Bureau last week unveiled two tweaks to its pending escrow regulations: a final rule clarifying and making amendments to its previously issued 2013 escrows final rule, and a final list determining both rural and underserved county status regarding the escrows rule.

The CFPB's escrow rule, issued in January, generally extends the required duration of a mortgage loan escrow account to five years, up from one year. Lenders that work in rural or underserved areas will be exempt from the escrow changes, provided they meet certain other criteria.

The final escrow rule clarifications released last week establish a temporary provision to ensure existing protections remain in place for higher-priced mortgage loans until expanded consumer protections take effect in January 2014. The rule also clarifies how to determine whether  a county is considered "rural" or "underserved" for purposes of applying an exemption.

The final list of CFPB-approved rural and underserved areas covers counties in 46 states and Puerto Rico. The CFPB defines rural counties by using the U.S. Department of Agriculture Economic Research Service's urban influence codes. Underserved counties are defined by reference to data collected under the Home Mortgage Disclosure Act.

Some counties' status may change from year to year, according to the CFPB.

For both CFPB releases, use the resource links.

CUs' European Network, EU Policymakers Talk Basel, FACTA, Inclusion

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BRUSSELS, Belgium (5/20/13)--Representatives from the European Network of Credit Unions (ENCU) and World Council of Credit Unions (WOCCU) met with European Union (EU) policymakers in Brussels on May 14-15 to advocate for several issues affecting European credit unions.

European Network of Credit Unions representatives who met with policymakers in Brussels included, from left: Anne Schneider, Policy Action; Breege-Anne Murphy, Irish League of Credit Unions (ILCU); Michael Edwards, World Council of Credit Unions; Ed Farrell, ILCU; Brian McCrory, ILCU; Pawel Grzesik, National Association of Cooperative Savings and Credit Unions (Poland); and Matt Bland, Association of British Credit Unions Ltd.  (Photo provided by the World Council of Credit Unions)

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The issues include: Reasonable interpretation of Basel Committee liquidity rules; the U.S. Foreign Account Tax Compliance Act (FATCA) and related European rules; and the provision of basic current accounts to the unbanked in order to promote financial inclusion.

Regarding the Basel liquidity rules, the ENCU group met with the European Commission to urge that credit unions' deposits at banks be treated similarly to other depository institutions under the Basel "Liquidity Coverage Ratio."

Although credit unions are not subject to the ratio, Irish commercial banks have told Irish credit unions they are being classified as "non-bank financial institutions"--a category that applies to non-depository institutions--for purposes of draft European liquidity guidance. That means banks are cutting the yields they will pay on credit union demand and term deposits, said WOCCU.

This treatment under the EU's Basel liquidity rules may cost the Irish credit union movement as much as $74.4 million a year in lost income unless EU regulators clarify and grant credit unions more favorable treatment, the group said. ENCU representatives will talk to the European Banking Authority on the issue this week in London.

"We believe that there has been some level of confusion regarding classification of credit unions for Basel liquidity purposes in Ireland and possibly other member states," said Michael Edwards, WOCCU vice president and chief counsel. "We will continue to engage European authorities on this issue to seek an outcome that is satisfactory for credit unions."

ENCU members also met with European Commission representatives about the impact of FATCA on EU credit unions as it relates to European data protection regulations and the likely upcoming tax information-sharing amendments to EU directives that will create what some have called a "European FATCA."

Though the European Commission envisions the European FATCA will focus on tax information sharing within the EU, it also expects the Paris-based Organization for Economic Cooperation and Development to establish a global version of FATCA, which would apply to credit unions in all, or most, jurisdictions worldwide.

ENCU members also asked commission members to consider credit union-friendly rules on basic current accounts for the unbanked. The measures would allow credit unions to continue outreach to underserved individuals without creating undue regulatory burdens. Representatives also discussed with policymakers the EU's upcoming directive on deposit-guarantee schemes and forthcoming revisions to the EU's anti-money laundering directive.

ENCU is a network of national credit union associations in Europe and WOCCU representatives who educate and engage with EU policymakers and other stakeholders on legislation that affects credit unions. ENCU was formally established in 2010 and is based in Brussels.