Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive


Second wounded veteran receives new home from CUs

 Permanent link
WOODBURY, Minn. (9/2/08)--In the culmination of a project that kicked off in Minnesota nine months ago, Minnesota Gov. Tim Pawlenty (R), the Credit Union National Association and state credit union leagues yesterday gave Sgt. Marcus Kuboy the keys to his new house in Woodbury, Minn.
Click for slide showSgt. Marcus Kuboy, who was injured by an improvised explosive device while serving in Iraq, thanks credit unions for their efforts in the Homes for Our Troops project. (Photo provided by Tom Cherrey)
This home is specially-adapted to meet the unique needs of Sgt. Kuboy, who was injured while serving in Iraq. Homes for Our Troops, the Minnesota Credit Union Network, the Republican National Convention staff and National Journal constructed the house for Sgt. Kuboy since the groundbreaking in April. A nationwide fundraising effort among state credit union leagues, individual credit unions and credit union system partners including Co-Op Financial Services and the Corporate Credit Union Network raised over $350,000 for the Sgt. Travis Strong and Kuboy homes. CUNA and National Journal also worked with Homes for Our Troops and the Democratic National Convention Committee on a companion project for a veteran’s home in conjunction with the Democratic National Convention. The keys for the Denver home were presented on Aug. 28 during the Democratic National Convention.

CUNA supports new Reg C threshold

 Permanent link
WASHINGTON (9/2/08)—The Credit Union National Association (CUNA) supports a Federal Reserve Board proposed rule to amend Regulation C, the Home Mortgage Disclosure Act (HMDA), by revising the threshold for reporting price information on higher-priced loans. In a comment letter, CUNA said noted that the Fed’s proposed change would bring the regulation in line with recent Regulation Z mortgage lending final rules. Regulation C currently requires lenders to report to regulators annually the spread between the annual percentage rate (APR) on a loan and the yield on comparable Treasury securities if the spread is at least three percentage points for first-lien loans or five percentage points for subordinate-lien loans. Under this proposal, a lender would report the spread if the loan APR exceeds an average of comparable prime mortgage rates by at least 1.5 percentage points for first-lien loans or 3.5 percentage points for subordinate lien loans. By making the threshold identical in both regulations, it will help ease the compliance burden of credit unions and other lenders that must follow the regulations, according to CUNA. However, CUNA also noted its concern that the proposed Jan. 1, 2009 implementation date will not provide sufficient time for lenders to make necessary programming changes. CUNA said the short timeframe “will be even more of a challenge in the current regulatory climate in which the Board and other federal financial institution regulators have issued a significant number of new, complex consumer protection rules over the past several years and will issue several more in the near future.” Use the resource link below to read the CUNA’s entire comment.

Final DNC speaker lineup featured heavy CU hitters

 Permanent link
DENVER (9/2/08)—Those keeping score of Thursday’s Democratic National Convention speaker lineup would have noticed each House member had a common credit union streak: With the exception of House Speaker Nancy Pelosi (D-Calif.), each was a cosponsor of the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). While the Speaker of the House generally does not co-sponsor legislation, these seven CURIA co-sponsors spoke in advance of Democratic presidential candidate Barack Obama’s acceptance speech Thursday at Invesco Field in Denver:
* Mark Udall (D-Colo.); * John Lewis (D-Ga.); * Diana DeGette (D- Colo.); * John Salazar (D-Colo.); * Ed Perlmutter (D-Colo.); * Jan Schakowski (D-Ill.); and * Louis Gutierrez (D-Ill.).
According to Credit Union National Association Legislative Affairs Vice President Ryan Donovan, the convention’s final night is generally reserved for the party's most well respected and influential members. “Credit unions should be very proud of that,” said Donovan. “It is a terrific illustration of the influence credit unions have developed with leaders in the House of Representatives as well as the success of our grassroots advocacy programs."

UBIT issues Quarterly filing court date

 Permanent link
WASHINGTON (9/2/08)—State-chartered credit unions filing Internal Revenue Service (IRS) Form 990-Ts, the "Exempt Organization Business Income Tax Return," and paying unrelated business income taxes (UBIT), will want to consult their accountants or tax advisors to discuss the need to file quarterly estimated tax returns on UBIT income, advises the Credit Union National Association (CUNA). That consultation should be pursued, CUNA says, whether the credit union has filed a 990-T or plans to do so for 2008. CUNA has learned that a handful of credit unions have been told by the IRS that they may be subject to interest or penalties if they fail to submit quarterly estimated tax reporting in years when they file, or expect to file, a 990-T form. At least one credit union received a notice after it filed a 990-T form for the first time in May 2008, for the 2007 tax year, stating that it not only had failed to include the UBIT tax payment due but also that it was being penalized for having not begun quarterly estimated tax reporting by April 15, 2007. The April date would have been 13 months before the credit union filed its first 990-T form and only a few weeks after the IRS issued its first technical advice memoranda (TAMs) taking the position that UBIT is due on the income from certain credit union products and services. CUNA says fair or not, the law is applied strictly and there is no "reasonable cause" excuse for failure to pay estimated taxes. “Unfortunately, the tax law and the 990-T instructions state that ‘generally, an organization filing Form 990-T must make installment payments of estimated tax if its estimated tax is expected to be $500 or more," says Eric Richard, CUNA general counsel. Estimated tax is tax minus allowable credits, and the applicable section of the tax code is 26 USC Section 6655(g)(3). CUNA advises that IRS Form 990-W can be used to help figure estimated UBIT liability. The estimated tax is due April 15, June 15, September 15, and December 15 for the tax year. “Whether there will be any broad effort by the IRS to enforce quarterly UBIT reporting is unknown, which is why it is important for state-chartered credit unions filing 990-T forms to discuss this issue with their accountants,” said Richard. On a related topic, a trial date of Aug. 31, 2009, has been set for Bellco CU vs. the Internal Revenue Service, a case filed earlier this year to challenge the government’s policies on UBIT issues. Bellco, of Greenwood Village, Colo., is seeking a refund of $199,000, based on UBIT taxes paid for 2000, 2001 and 2003. The Colorado credit union refund claim is based on income generated primarily through sales of credit life and credit disability insurance over those three tax years. Revenue generated from sales of accidental death and disability insurance, and the credit union's involvement with CFS Member Financial Services, a credit union service organization, were included under the 2003 refund claim. The Bellco lawsuit was the second filed by a credit union on UBIT issues this year. In January, Community First CU, Appleton, Wis., filed a complaint in federal court challenging the IRS on its determinations that certain insurance products offered to members fall outside the credit union's main mission and are subject to UBIT. The UBIT Steering Committee, comprised of CUNA, CUNA Mutual Group, the American Association of Credit Union Leagues, and the National Association of State Credit Union Supervisors, strongly supports the credit unions’ efforts.

Inside Washington (09/01/2008)

 Permanent link
* WASHINGTON (9/2/08)—Along with the eight credit unions who received a total of $4.2 million in assistance from the U.S. Department of the Treasury's Community Development Financial Institutions (CDFI) Fund (News Now Aug. 29), an additional five credit unions were awarded technical assistance grants bringing the credit union totals to 13 credit unions and $4.4 million in funds. Also, when including the Financial Assistance award to the National Federal of Community Development Credit Unions, the totals are 14 credit union organizations and $5.4 million in CDFI assistance. CDFI Director Donna Gambrell last week announced more than $54 million in awards for 89 organizations serving economically distressed communities across the nation … * WASHINGTON (9/2/08)—The Federal Deposit Insurance Corp. (FDIC) Friday announced it had become receiver of $1.1 billion-asset Integrity Bank, Alpharetta, Ga., after that institution was closed by the Georgia Department of Banking and Finance. The FDIC approved the assumption of Integrity’s $974.0 million in total deposits by Regions Bank, Birmingham, Ala. All depositors of Integrity Bank, including those with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Regions Bank for the full amount of their deposits, and they will continue to have uninterrupted access to their deposits, the FDIC said in its announcement. Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance, the agency reminded. The failed bank's five offices will reopen today as branches of Regions Bank, but temporarily customers of both banks are advised to use their existing branches until Regions Bank can fully integrate the deposit records of Integrity Bank. Regions Bank agreed to pay a total premium of 1.012%t for the failed bank's deposits. In addition, Regions Bank will purchase approximately $34.4 million of Integrity Bank's assets, consisting of cash and cash equivalents. The FDIC will retain the remaining assets for later disposition… * WASHINGTON (9/2/08)--Federal Insurance Deposit Corp. Chairman Sheila Bair was named the U.S.’s most powerful woman by Forbes (Aug. 29). Bair was No. 2 on the list of the world’s 100 most powerful women, second to Germany’s Chancellor Angela Merkel ... * WASHINGTON (9/2/08)--The Federal Reserve Board and Security Pacific Bancorp of Los Angeles signed an agreement to maintain financial soundness of Security Pacific. Under terms of the agreement, Security Pacific cannot: take dividends or any other form of payment representing a reduction in capital from the bank without approval from the Fed; declare or pay dividends unless the declaration or payment is consistent with the Fed’s policy statement on cash dividends; and make any distributions of interest, principal or other sums on subordinated debentures without approval of the Fed ... * WASHINGTON (9/2/08)--The Treasury Department has distributed 2.404 million stimulus payments, totaling $1.5 billion, since mass disbursement of the payments ended July 11. As of the end of August, 114.809 million payments have been distributed, totaling $93.389 billion ...

CUNA mini blog keeps readers current on RNC

 Permanent link
WASHINGTON (9/2/08)--Credit Union National Association (CUNA) Editorial Communication Vice President David Klavitter posts comments and observations almost minute by minute at the Republican National Convention (RNC). which started Monday in Minneapolis-St. Paul. Credit unions are encouraged to check in on Twitter, a microblogging service, to get the latest credit union take on happenings at the RNC this week, as they did last week at the Democratic National Convention in Denver. Twitter allows instant, extremely short online postings--limited to no more than 140 characters each. CUNA Staff and volunteers, state leagues and corporates. attending both national conventions, aim to raise the profile of credit unions during the high-profile political events. Use the resource link below to stay up-to-date: Follow Klavitter on Twitter.