Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive


Policymakers Set Tight Tax Reform Timeframe

 Permanent link
WASHINGTON (6/28/13)--Credit Union National Association President/CEO Bill Cheney said Wednesday that the good work credit unions and their members have done so far to tell lawmakers "Don't Tax My Credit Union" must be only the beginning of efforts to preserve the credit union tax status. Now that key policymakers have made it clear they mean to move quickly on tax reforms, credit union advocates must ramp up their volume, he encouraged.

The leaders of the Senate Finance Committee, Sens. Max Baucus (D-Mont.) and Orrin Hatch (R-Utah), sent a letter yesterday to all their Senate colleagues advising them to plan to be ready to tackle a tax reform vote early this Fall.

The letter notes that the committee will take a "blank slate" approach to its bill, which would remove all tax expenditures from the code and would add back in those that make the grade.

"Our tax code is bloated and outdated.  The income tax was established a century ago, in 1913.  And it has been a generation since our last tax reform in 1986.  As Chairman and Ranking Member of the Finance Committee, we are determined to complete tax reform this Congress," Baucus and Hatch pen in their "dear colleague" letter.

The senators' letters warns there is a tight timeframe for lawmakers who want to suggest language for the reforms; all proposed language for a bill must be submitted for the committee's consideration by July 26, it says.

"This is the scenario we have told credit unions to expect and it is the timing we have anticipated," said Cheney. "CUNA and the leagues launched our groundbreaking 'Don't Tax My Credit Union' campaign over a month ago to defend this threat.

"Our success will rest on credit unions engaging their members to send Congress a strong message: Don't Tax My Credit Union."

Cheney noted that credit unions offer higher returns on savings, lower rates on loans, and most importantly, low or no fees--and that these benefits combine to result in more than $8 billion in direct financial benefits each year to the 96 million Americans who belong to credit unions.

Already, by the end of yesterday, a total of almost 207,000 messages have been sent to the House and Senate. Some 300,000 people have seen the "Don't Tax My Credit Union" message via social media outlets like Facebook and Twitter. 

"That can only be a beginning to the voices Congress hears so lawmakers truly understand that a new tax on credit unions would be a tax on those 96 million credit unions members," Cheney said.

CUNA members may use the resource link to access CUNA tax-status advocacy tools.

Obama Creates Young American Financial Capability Council

 Permanent link
WASHINGTON (6/28/13)--The Obama Administration this week announced a new President's Advisory Council on Financial Capability for Young Americans to help young people "get the skills and knowledge they need to pursue successful careers and contribute to the nation's economy."

"Experience shows that a sound financial footing early in life is important to building wealth and establishing financial security. This new council will advise the president and his administration on ways to improve the financial skills of young Americans so that they can make smart decisions about going to college, using financial products, and even saving for their retirement," U.S. Treasury Assistant Secretary for Financial Institutions Cyrus Amir-Mokri said in a release.

The new advisory group will be led by the Treasury. The group will build on the work of the President's Advisory Council on Financial Capability.

Private, public, and nonprofit sector innovators will be invited to serve on the council. Treasury Secretary Jack Lew, Education Secretary Arne Duncan and Consumer Financial Protection Bureau Director Richard Cordray will also take part.

Additional council members will be announced soon, and the first council meeting will be held later this year, the Treasury release said.

For more on the council, use the resource link.

Metsger Pledges Effective, Not Excessive Reg Approach

 Permanent link
WASHINGTON (6/28/13)--Noting that regulators need to be watchful "in good times and bad," National Credit Union Administration board nominee Richard Metsger Thursday said credit union rules need to be modernized to address the threats presented by today's financial marketplace.

Click to view larger image Richard Metsger, right, purchased his first car, a 1957 Chevy, with the help of a $350 loan from Portland Teachers CU, and later went on to serve on that credit union's board of directors. Here, the former Oregon state senator and current NCUA board nominee is sworn in before a Senate Banking Committee nomination hearing. (CUNA Photo)
The NCUA nominee was responding to a question asked by Senate Banking Committee Chairman Tim Johnson (D-S.D.) during a nomination hearing. Johnson asked about the lessons credit unions have learned from the financial crisis, and what additional steps the agency should take to strengthen the credit union system.

Metsger said that interest rate risk, emergency liquidity access and tech-related concerns are the top level risks on the horizon that the agency should examine.

On interest rate risk, Metsger noted that credit unions are very involved in the mortgage marketplace. "We all know what happens in low interest rate environments...It's going to change eventually, we don't know when, or where, or how much...So credit unions need to be prepared," he said. As the regulator, NCUA should work to ensure credit unions are prepared for and manage that risk, he added.

Metsger also said ensuring that all credit unions have some sort of plan to access liquidity in emergency situations is vital.

Addressing technological risks will be another priority if he is confirmed, Metsger said. No matter how well credit unions are run, "the technology that has helped our lives so much has also created tremendous risk...systemic the share insurance fund." Credit unions can in a matter of milliseconds possibly have tens of millions of dollars taken away, he noted. "I will work diligently, if I am confirmed, to see that the rules and regulations of the NCUA are as contemporaneous as possible to meet the technological risks, particularly in the area of cybersecurity," Metsger said.

"If confirmed, my vision is for NCUA to be recognized as an agency that manages its own fiscal house well, proposes regulatory action that is effectively targeted to achieve the desired outcome without placing unnecessary burden on the credit unions themselves and, above all, maintains the confidence and trust the American public places in their local credit union," he said in a prepared statement.

"Updating, simplifying, eliminating and clarifying existing rules to ensure that they are effective, but not excessive, consistent with safety and soundness," will be another focus if he is confirmed to serve the agency, the nominee said. Credit union safety and soundness is "job one" of the regulator, and "must not be compromised," Metsger added.

"I firmly believe a regulatory agency should strive to be its own best critic," he said, referencing NCUA's review of one-third of its rules and regulations each year. "I can assure you that, if confirmed, this will not be merely a mechanical exercise for me. I will approach this rolling review with diligence."

Legislation that would increase the credit union member business lending cap was also briefly discussed during the hearing. Sen. Jack Reed (D-R.I.), a co-sponsor of the Small Business Lending Enhancement Act (S. 968), asked Metsger if increasing the MBL cap from 12.25% to 27.5%, as proposed in the bill, is a good idea. "I think it's a good idea to recognize that it is the purview of Congress to make decisions," Metsger said.

If confirmed, Metsger would fill the vacant NCUA board seat created when former member Gigi Hyland exited last year, served as Oregon state senator from 1999 to 2011, where he chaired the Oregon Senate committee that heard all financial institution legislation. He was a member of the board of directors at Portland Teachers CU from 1993 to 2001 and has also been a board member of Financial Beginnings, a nonprofit focused on increasing students' financial literacy.

Other nominations discussed include: Rep. Melvin L. Watt (D-N.C.) to be director of the Federal Housing Finance Agency; Dr. Jason Furman, of New York, to be a member and chairman of the Council of Economic Advisers; Kara M. Stein of Maryland, to be a member of the Securities and Exchange Commission; and Dr. Michael S. Piwowar of Virginia, to be a member of the Securities and Exchange Commission.

The committee must vote on these nominations. If approved by the committee, the nominees will also need to be confirmed by a full U.S. Senate vote.

Sign In Today To Share 'Unite' Stories

 Permanent link
WASHINGTON (6/28/13)--There is a new way for the credit union community to share stories about steps they have taken to support the Credit Union National Association's Unite for Good initiative by fostering its goals of taking action to remove barriers, creating awareness and fostering service excellence.

To support the Unite for Good vision in which "Americans choose credit unions as their best financial partner," CUNA announced Thursday that it has expanded the Unite for Good site to host a virtual credit union community, which will allow credit unions to communicate no matter where they are.

Credit unions now have the option to create a profile on, and then share their stories, ask questions, and cultivate relationships with credit unions across the country.

"Working together is the foundation of success and that is why this initiative is so crucial to the credit union movement," said Paul Gentile, CUNA executive vice president of communications and strategic messaging.

"We wanted to create a space that encouraged credit unions to share their success, ask questions and get to know each other on a deeper level. Once we are all working together and presenting a unified front, then we will be able to achieve our vision of being Americans' best financial partner."

Although all posts will be visible to the public under the "share stories" tab, profile information will only be accessible to other members who have created a profile.

Credit unions can email with questions or to request assistance setting up a profile or posting a story.

NEW: Miller Relief Bill Intro'd In House Today

 Permanent link
WASHINGTON (6/28/13, UPDATED 11:35 a.m. ET)--House Financial Services Committee Vice Chairman Gary Miller (R-Calif.) introduced long anticipated legislation today, H.R. 2572, that would provide regulatory relief for credit unions and community banks.

Miller's bill focuses on credit unions and topics discussed within its section range from such things as some enhancements to National Credit Union Administration authority, to improved capital standards for credit unions, to a cost-benefit analysis of rules, past and present.

"Credit unions wholeheartedly thank Rep. Miller for acting on their great need for regulatory relief so fewer resources are diverted from their true business of serving their members," Sam Whitfield, Credit Union National Association vice president of legislative affairs, said as CUNA welcomed the bill. He added CUNA's appreciation that Miller included CUNA in the development of his legislation.

Miller's bill will likely be joined by other regulatory relief legislative initiatives coming out of the financial services panel this year.

Other Financial Services Committee members are said to be preparing to offer bipartisan regulatory relief bills and are working to find for areas where credit union and community bank interests may intersect in a bill. CUNA has assured lawmakers that such areas exist; for instance, one such area is examination fairness legislation.

During a hearing in March, CUNA delivered a 35-point plan for credit union regulatory relief to federal lawmakers. Among changes promoted by CUNA are:

  • Increasing National Credit Union Administration budget transparency;
  • Adjusting the treatment of non-owner occupied one- to four-family dwelling loans for credit unions from business loans to residential real estate loans;
  • Increasing the maturity limit for higher education loans made by federal credit unions; and
  • Expanding investment authority in credit union service organizations.

CFPB to Auto Lenders: Refund $6.5M To Servicemembers

 Permanent link
WASHINGTON (6/28/13)--U.S. Bank and a nonbank partner, Dealers' Financial Services (DFS), will be made to repay $6.5 million in total proceeds to U.S. servicemembers under the terms of a Consumer Financial Protection Bureau enforcement action.

U.S. Bank and DFS allegedly violated the Truth in Lending Act and other federal laws that prohibit deceptive marketing and lending practices when they failed to disclose certain terms to participants in a Military Installment Loans and Educational Services (MILES) auto loan program.

The CFPB in a release said the firms specifically failed to properly disclose an allotment fee charged to participants, and did not inform participants on the timing of allotment payments. The companies also misrepresented the true cost and coverage of add-on products financed along with the auto loans, the CFPB added.

The military discretionary allotment system was established to help servicemembers make payments from their accounts while they were away on military duty. The system predates more modern automated payment systems such as automated withdrawals and electronic transfers.

Certain creditors can require military personnel to make payments through the allotment system rather than other forms of credit. Third-party allotment processors often charge fees, the CFPB said.

Around 50,000 servicemembers were impacted by these actions, the CFPB said. The payments will be sent to servicemembers that had outstanding MILES loans between Jan. 1, 2010 and today.

For more on the CFPB action, use the resource link.