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Washington Archive

Washington

IRS form will report inflated compensation says CUNA

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WASHINGTON (6/2/08)--Proposed changes to instructions for filing an Internal Revenue Service (IRS) form that reports the pay of executives at state chartered credit unions will result in filers reporting “inflated figures” that do not reflect true compensation, the Credit Union National Association (CUNA) told the tax-collecting agency in a comment letter. CUNA was commenting on the IRS draft instructions and schedules to the redesigned Form 990, “Return of Organization Exempt from Income Tax,” which also includes reporting of the compensation of executive staff. Only state-chartered credit unions must file the forms; federal credit unions are exempt. In noting that the proposed instructions would result in inflated compensation figures for executives, CUNA suggested that nontaxable expense reimbursements and fringe benefits should not be included as “compensation.” Additionally, CUNA suggested setting compensation thresholds that are adjusted geographically to reflect differences in cost of living. CUNA also stated that the threshold for reporting compensation for employees other than executives is too low, and would inaccurately include employees without “sufficient authority or control in the workplace.” In other comments, CUNA suggested:
* “Central organizations” should be allowed to aggregate compensation information from subordinate groups; * The requirement to itemize specific data on group returns is unnecessary; * Providing a notice of change of the method of filing to the IRS on group returns should be sufficient, rather than seeking agency consent; * The definition of “key employee” is too broad, and could result in unintentionally including compensation information of such personnel as department heads, middle managers and others who lack responsibilities, power or influence of “key employees.”
Access the complete text of CUNA’s comment letter using the link below.

Inside Washington (05/30/2008)

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* WASHINGTON (6/2/08)--Investment banks need greater oversight, said Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair. In an interview last week, Bair suggested that Congress devise a system to close an investment bank in an orderly fashion should it become insolvent (American Banker May 30). The FDIC’s ability to create bridge banks to take over and sell assets of failed lenders is a “good model” to help investment banks, she said. If investment banks can access Federal Reserve loans, regulators should be able to watch over how the banks manage risk, she added ... * WASHINGTON (6/2/08)--A new study from the Urban Institute indicates that consumer confusion about the home buying process often leads to higher closing costs. The study found significant disparities in closing costs even when it compared borrowers with identical credit scores, loan terms and mortgage amounts. The study analyzed more than 7,500 mortgages originated in May and June 2001. The Department of Housing and Urban Development (HUD) is proposing to improve disclosures of the loan terms and closing costs consumers pay when they buy or refinance a home. HUD also is proposing that all lenders and brokers provide consumers with a standard good faith estimate ...

Reg Zs open-end credit rules under review

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WASHINGTON (6/2/08)--Credit unions can comment on the Federal Reserve Board proposed amendments to open-end credit rules under Regulation Z, which includes changes related to credit cards and merchant-specific credit plans. This proposal revises the comprehensive open-end proposal that was issued last year in order to complement and be consistent with the proposals issued recently by the National Credit Union Association, the Fed, and the Office of Thrift Supervision. The proposal addresses unfair and deceptive practices related to credit cards and overdraft protection plans. Use the resource link for more information and to access CUNA's Regulatory Comment Call.

Growth involvement highlighted in 2007 CUNA annual

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WASHINGTON (6/2/08)--The 2007 Credit Union National Association (CUNA) Annual Report and audited financial statements now are available online. A printed version of the report will accompany each copy of the June edition of Credit Union Magazine Paramount objectives for CUNA during 2007 were growth and member involvement--most notably as part of CUNA's expanded financial literacy programs, said CUNA Chairman Tom Dorety, who also is president/CEO of Suncoast Schools FCU, Tampa, Fla. He details some of last year's challenges and accomplishments in CUNA's 2007 Annual Report. "Economic anxieties bred new political pressures. We were ready. We beefed up our political action programs to help Congress assess proposed legislative responses to the emergency. We joined with credit union colleagues, within and outside of CUNA, to assure absolute unity in coping with the stresses,” said Dorety. "We continued last year to convince Members of Congress that the pending CURIA--Credit Union Regulatory Improvements Act--legislation will help us better serve their people back home," he continued, noting that congressional sponsors rose to 143 during the year, from the previous year's 125. Use the resource link below to access the report, financial statements, and year-in-review video.