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Washington Archive

Washington

Inside Washington (07/02/2008)

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* WASHINGTON (7/3/08)--The Federal Deposit Insurance Corp. (FDIC) is encouraging banks to follow certain legal requirements when reducing or suspending home equity lines of credit (HELOCs). The FDIC sent a financial institution letter last week outlining its regulatory considerations. The agency urged institutions to work with borrowers when possible to mitigate financial hardships. It also warned that banks could face penalties for failing the meet the outlined legal standards ...

CUs asked to comment on incidental powers

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WASHINGTON (7/3/08)—Credit unions are being asked to comment on a recent National Credit Union Administration (NCUA) plan to update its rule on incidental powers for federal credit unions. The NCUA proposal would add illustrations of permissible activities under the categories of correspondent services, operational programs, and finder activities, and the Credit Union National Association seeks credit union comment by July 15. Specifically CUNA is asking:
* What issues may arise from the provision of the proposal to include foreign credit unions under the correspondent services category? * Are there any unforeseen problems that may arise in including payroll services within the operational programs category? * Are there any specific concerns with the provision of the proposal to clarify that finder activities include an FCU’s negotiation of group discounts? * Are there any specific concerns with the provision of the proposal to clarify that finder activities include the performance of administrative functions for outside vendors? * Is the inclusion of insurance as an illustration under finder activities likely to add clarification? * And, are there any other comments or concerns regarding NCUA’s proposed rule?
Comments are due to the agency by July 28. For more details on the NCUA proposal and the CUNA comment call, use the resource link below.

More power for CUSOs no records access says CUNA

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WASHINGTON (7/3/08)—The National Credit Union Administration (NCUA) is moving in the right direction with its proposal to expand credit union service organization (CUSO) activities, but could go further to enhance CUSO’s abilities to meet credit unions’ needs, according to the Credit Union National Association (CUNA). CUNA urged the NCUA to broaden CUSO authority by allowing them to choose from the range of activities permissible for federal credit unions. In particular, CUSOs should be able to engage in indirect automobile lending services and to sell loan participation interest in a credit card portfolio to credit unions, CUNA said in a recent comment letter. The NCUA’s proposal would apply provisions of the CUSO rule for federal credit unions to state-chartered credit unions regarding corporate separateness and access to books and records of the CUSO. CUNA does not support these revisions because it believes they would encroach on the authority of state regulators to oversee their credit unions’ activities. CUNA also does not agree with a provision in the CUSO proposal that would require all federal credit unions with net worth below 5 to seek prior approval from NCUA to recapitalize an insolvent CUSO. Rather, CUNA recommended, credit unions with 4-5% net worth should only be required to provide prior notice to the agency, which NCUA could pursue if there are concerns. To read the complete CUNA comment letter, use the resource link below.

CUs encouraged to seek VITA grants

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ALEXANDRIA, Va. (7/3/08)—Another layer is being plotted for the National Credit Union Administration’s (NCUA’s) efforts to encourage credit unions to offer Volunteer Income Tax Assistance (VITA) services to their membership and community. The agency announced Wednesday that it will partner with the U.S. Internal Revenue Service (IRS) to produce an informational video on the IRS’ VITA program. The video will be entitled, “Establishing a VITA Site: How and Why.” VITA is an IRS program that helps low- and moderate-income taxpayers complete their annual tax returns at no cost. Credit unions and community organizations receive IRS provided training in the preparation of basic tax returns and establishment of tax preparation sites. The video will encourage credit unions to offer VITA services to their membership and community, with a special emphasis on use of the IRS VITA Grant Program, according to an NCUA release. Credit unions are eligible to apply to that program, an $8 million, one-year initiative designed to extend VITA Program services to underserved populations and hard-to-reach areas, both urban and rural. A notice in the July 1 Federal Register noted that applications for the VITA matching grant program currently are available and the deadline for submissions is Sept. 2. Funding for the program was approved by the 2008 Treasury appropriations legislation. The video, according to the NCUA, is designed to complement the agency’s 2007 webinar focusing on credit union partnerships with community groups in providing and promoting VITA services. The NCUA plans to have the video posted on its NCUA’s The Resource Connection website by August 1.

Johnson to stay at helm til August

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ALEXANDRIA, Va. (7/3/08)—JoAnn Johnson is expected to stay in her position as chairman of the National Credit Union Administration (NCUA) until Aug. 1 and will be the one to lead the next open board meeting July 24. At a farewell gathering of credit union representatives held at the agency headquarters here Wednesday, Johnson said she has agreed to stay on at the agency until the first of August so her successor, Michael Fryzel, can wrap up any pending personal matters. Fryzel was confirmed by the Senate last week to fill a vacancy that will be created with the exit of Johnson. He has not yet been sworn in. President George W. Bush has indicated he will designate Fryzel as chairman. At the sendoff, Credit Union National Association President/CEO Dan Mica commended Johnson for her concern for credit union members and her appreciation of the credit union system during her tenure on the NCUA board. Johnson has served for six years, and has been chairman for the final four. In what was called “a moving tribute” by a participant, NCUA Executive Director Leonard Skiles described the close working relationship the departing chairman has had with the agency staff. Johnson has said that when she leaves the NCUA, she looks forward to returning to "my family, and my roots, in Iowa." The NCUA staff presented Johnson with a certificate for a new sewing machine to greet her when she arrives home.