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CUs rally for CU board member in today's Ga. runoff race

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GEORGIA (7/22/14)--Mike Collins, Republican congressional candidate, trucking company owner and credit union board member, will attempt to take the next step toward November with a runoff election today. If elected, Collins, a board member of Associated CU, based in Norcross, Ga. wth $1.3 billion in assets, would be the first credit union board member ever elected to Congress from Georgia.

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Leading up to the May election, Cindy Connelly, senior vice president of government influence for the Georgia Credit Union Affiliates (GCUA), praised Collins' dedication to credit unions while on the campaign trail. She said Collins visited multiple branches throughout the district, and called him "a legislator who has spent years learning about the issues that impact credit unions and their members."

Seven different mailers were sent to 11,000 households with credit union members leading up to the runoff election (see one example to the right). These households contain members of six different credit unions.

GCUA also hosted Collins on a tour of six credit unions during the campaign, and several local credit unions included "get out the vote" style articles in newsletters and on their websites.

Collins and runoff opponent Jody Hice were the top two vote-getters out of a field of seven Republican candidates in the May 20 primary. Collins finished only 270 votes behind Hice. Since neither candidate received 50% of the vote, today's runoff will determine the Republican nominee.

Georgia's 10th District has elected Republican legislators since 1995. The seat is currently held by Rep. Paul Broun, who was defeated in the primary for a chance to fill the seat held by retiring Sen. Saxby Chambliss (R).

Retailers' suit against Visa, MasterCard allowed to proceed

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NEW YORK (7/22/14)--U.S. District Judge John Gleeson declined to dismiss lawsuits filed by retailers against Visa and MasterCard last week. The lawsuits have been brought against the two credit card companies after retailers accused them of fixing the interchange fees charged to merchants for each transaction using a credit card.

Target, Amazon and WalMart are among the retailers that opted out of an approximately $5.7 billion settlement in December. The settlement, approved by Gleeson, also involved Visa and MasterCard and retailers nationwide that made similar allegations.

"This is the first step in the case for the retailers that have opted out of the settlement, but is not the last," said Eric Richard, executive vice president and general counsel for the Credit Union National Association. "The decision means that the retailer's pleadings were sufficient that Judge Gleeson felt bound by procedural rules to send the case to its next stage."

The retailers who opted out of the settlement in December said it was not adequate and that it offered meaningless reforms that would not help them control the costs of accepting credit cards, according to a report by Reuters . Many of those retailers have filed their own lawsuits.

NCUA chair affirms likely areas of change for RBC rule

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ALEXANDRIA, Va. (7/22/14)--With three Listening Sessions on the books, the National Credit Union Administration affirmed Monday that its next steps will include incorporating comments from the more 400 participants who attended. The agency's risk-based capital (RBC) proposal was the primary topic of discussion at the sessions, held in Los Angeles, Chicago and Alexandria, Va., but examinations,  and the role of small credit unions were also addressed.
 
"As always, at this year's Listening Sessions there was spirited discussion on many topics, including the proposed risk-based capital rule," said NCUA Chair Debbie Matz said. "This dialogue is what makes these events so valuable. It's an opportunity for regulators and credit unions to talk frankly, face-to-face, about policy and examination issues and exchange ideas for constructive solutions. We all have the same goals: safety and soundness, prudent lending and effective regulation."
 
In its press release following the last Listening Session, the NCUA reported that "only 3% of credit unions would experience a change in Prompt Corrective Action status" under the proposal.  CUNA has expressed concern that several hundred credit unions would find themselves uncomfortably close to PCA thresholds, and would collectively need to raise between $3 billion and $4.5 billion in additional capital to restore previous margins above those thresholds.  
 
Matz said the "many valid questions and concerns" received at the sessions will be added to the more-than 2,000 comment letters received when the agency considers changes to its RBC proposal.
 
"We are listening carefully, and I anticipate the agency will make appropriate changes," she said. "For starters, we plan to lower the risk weights on investments, mortgages, member business loans, credit union service organizations and corporates, as well as extend the implementation period."
 
Matz said the NCUA will review the best way to address material interest rate risk in the Prompt Corrective Action framework as the Federal Credit Union Act requires, while evaluating whether more emphasis should be placed on the supervisory process rather than on risk weights in the final rule.
 
The proposed 18-month implementation period was among the major concerns with the proposal raised by the Credit Union National Association, as well as many of the credit unions and organizations that submitted comment.
 
Extending the implementation period will allow affected credit unions enough time to adjust operational plans and balance sheets, while giving the NCUA time to update the Call Report system and train field examiners.
 
According to the NCUA, the final rule will make clear that only the NCUA board, not any individual credit union examiner, can make a determination about whether a specific credit union needs to hold more capital.
 
 
"CUNA is pleased that these changes, which we have strongly advocated, are in progress," interim President/CEO Bill Hampel noted.  He commended the agency for holding the sessions and for agreeing to make these importance changes.  He added that CUNA continues to be concerned that the agency has not adequately explained the need for a higher RBC requirement for well-capitalized credit unions than that applied to adequately capitalized credit unions.  
 
"The risk level of well-capitalized credit unions does not justify the proposed higher requirement.  CUNA will continue to seek ways to work with NCUA to address this very significant concern,",he said.
 
The Federal Credit Union Act requires NCUA to maintain a "comparable" risk-based capital system to the federal banking agencies, which updated their risk-based capital rules in 2013. The Government Accountability Office and NCUA's Inspector General also have recommended that NCUA's rule be updated.
 
"I am confident that NCUA will produce a sensible final rule that meets the requirements of the Federal Credit Union Act and not disadvantage credit unions in the market," Matz said.
 
Audio recordings of each session are expected to be available soon on the NCUA's website.

CFPB to accept prepaid card, nonbank product complaints

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WASHINGTON (7/22/14)--The Consumer Financial Protection Bureau will now accept consumer complaints involving reloadable cards and nonbank services, it announced Monday. This includes gift cards, benefit cards and general purpose reloadable cards, along with debt settlement services, credit repair services, pawn and title loans and other nonbank products.

"By accepting consumer complaints about prepaid products and certain other services we will be giving people a greater voice in these markets and a place to turn to when they encounter problems," said CFPB Director Richard Cordray.

According to the CFPB, prepaid cards can have fewer consumer protections than debit or credit cards. In the coming months the bureau plans to issue a proposed rule aimed at increasing federal consumer protections for general purpose reloadable prepaid cards.

The CFPB also handles complaints about mortgages, bank accounts and services, private student loans, auto and other consumer loans, credit reporting, debt collection, payday loans, and money transfers.

Use the resource link below for more information.

House Fin. Serv. Committee to examine 4 years of Dodd-Frank

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WASHINGTON (7/22/14)--The House Financial Services Committee will conduct a hearing Wednesday to examine specific provisions and the cumulative impact of the Dodd-Frank Act. Signed into law by on July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was a response to the financial crisis that began in 2008.

The Dodd-Frank Act created approximately 35 new rules that affect credit unions, according to the Credit Union National Association's analysis. Throughout the legislative process, CUNA worked to minimize the legislation's regulatory burden on credit unions, reminding lawmakers that credit unions did not cause the problems that the Dodd-Frank Act was intended to address.

The hearing, titled "Assessing the Impact of the Dodd-Frank Act Four Years Later," will explore such provisions as the Volcker Rule, Orderly Liquidation Authority and consumer financial protection.

The following witnesses will speak at the hearing:
  • Dale Wilson, chairman and president/CEO, First State Bank of San Diego;

  • Anthony Carfang, partner, Treasury Strategies Inc.;

  • Paul Kupiec, resident scholar, American Enterprise Institute; and

  • Thomas Deas, vice president/treasurer, FMC Corp., on behalf of the Coalition for Derivatives End-Users.
The hearing will start at 10 a.m. (ET) Wednesday in the Rayburn House Office Building.

The House Financial Services Committee also released a 97-page report Monday examining the impact Dodd-Frank Act. Use the resource link below to access the report.