Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

Washington Archive

Washington

Small biz lawmakers underscore need for more CU biz credit at Hill event

 Permanent link
WASHINGTON (9/13/12)--A Credit Union National Association (CUNA)-sponsored Capitol Hill event Wednesday focusing on the timeliness of adopting credit union business lending legislation was live-streamed on the internet, bringing the urgency of the legislation into the offices of House and Senate members, as well as headquarters of credit unions and leagues across the country.

Click for slide show At left, Sen. Mark Udall (D-Colo.), who is chief sponsor of a Senate bill to increase credit union member business lending (MBL), is greeted by CUNA President/CEO Bill Cheney (right) as he arrives at a Wednesday press event on Capitol Hill to shine a spotlight on the benefits an MBL cap increase would provide small businesses and the economy at large. (CUNA Photo)
The sponsors of Senate and House legislation to give credit unions more business lending authority--Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.)--made special appearances at the event, which drew nearly 200 credit union and small business supporters, as well as members of congressional staff. The event also included panels of small business advocates, credit unions and small business owners.

Presented by the Washington-based publication The Hill, the event was designed to highlight House and Senate legislation that would increase the credit union member business lending (MBL) cap to 27.5% of assets, from 12.25%. Members of both parties support the MBL cap increase bills, and H.R. 1418 has 140 cosponsors. S. 2231 has 21 cosponsors, and Senate leadership remains committed to a floor vote on the MBL legislation.

Speaking first, Udall said that the restriction on credit union business lending is a "regulation that we ought to lift."

"When credit unions have this additional capacity to lend to small businesses, it's a no-cost, sure-fire way to grow our economy," Udall said. "Simply put: There are credit unions with money to lend, and small businesses in many communities that need loans to spur job growth -- why don't we get government out of the way and let our economy grow?"

Noting the large group of credit union business lending supporters assembled at the briefing, Royce said he was delighted at the strong turnout of nearly 200. "It reflects the interest in what we can do to help small business in the United States; this is where we should start," he said.

Cheney noted that increasing the MBL cap for credit unions is one of the few issues that can bring divergent groups together in the partisan atmosphere of Washington. The economy desperately needs every reasonable chance it can get to help create new jobs, and the time is now for Congress to pass legislation giving credit unions more authority to make business loans, Cheney added. "It comes down to this," Cheney said: "We know the economy needs to add jobs; we know small business needs greater access to credit; we know we have at least a partial solution at our fingertips. That is: Give credit unions more authority to make business loans."

In one of two panel discussions, Eli Lehrer of the R Street Institute said the two MBL cap increase bills are policy changes Congress needs to consider "seriously" and at the earliest possible date.

Panelists said they saw no clear reason to oppose an MBL cap increase, and while banks have claimed there is no demand for small business loans, John Arensmeyer, CEO of The Small Business Majority, said his own experience has shown universal demand for small business loans across the country.

A Small Business Majority survey discussed during the event found that around 60% of small business owners said it is harder now to get a loan than it was four years ago. Another 60% said they have had issues accessing loans to help them grow their businesses and hire more workers, and 52% of respondents said they have used credit cards, not small business loans, to help finance their businesses. Small business owners overwhelmingly backed increasing the MBL cap for credit unions, supporting that change by a 2 to 1 ratio, according to the survey.

Most small businesses need small chunks of capital, and that is where credit unions can step in, Arensmeyer said. There's no reason why businesses should not have access to as much credit as they need, from as many sources as possible, he added.

Lehrer noted that a large percentage of credit union small business loans go to specialized business sectors, such as taxi cab drivers and organic farmers, that may be overlooked or misunderstood by larger lenders.

While CUNA has estimated that the proposed MBL cap increase could inject $13 billion in funds into the economy, creating as many as 140,000 new jobs in the first year following enactment, Steve Pociask of the Competitive Enterprise Institute said the value of an MBL cap increase may be, in fact, undervalued. When people get these new jobs, they will spend what they earn, creating a multiplier effect throughout the economy. He also noted that many of these loans could go to small start-ups, helping spur new innovation in the economy.

Eric Blinderman, International Litigation Counsel, and owner of two New York, N.Y. restaurants, and Zachary Davis, owner of The Penny Ice Creamery in Santa Cruz, Calif., both emphatically supported increasing the MBL cap. Blinderman noted that the multiplier effect from increased business lending would have a broad impact, helping both his employees and the farms his restaurants work with.

Brad Green, CEO of Listerhill CU, Muscle Shoals, Ala., and Brooke Van Vleet, CEO of St. Helens Community FCU. St. Helens, Ore., also spoke on the second panel. Green said his credit union has been forced to deny loans to extremely qualified borrowers due to the MBL cap. Van Vleet said her credit union, which currently provides $56 million in funds to 200 MBL participants, is helping fund the local economy by supporting a broad range of businesses in an area with high unemployment. She said her credit union is grandfathered, and is not subject to the 12.25%-of-assets MBL cap, but would only have the authority to lend around $20 million if it were subject to the cap, cutting the credit union's portfolio in half.

CU reps among CFPB Consumer Advisory Board members

 Permanent link
WASHINGTON (9/13/12)--Two credit union representatives are among the 25 consumer experts from outside the federal government that the Consumer Financial Protection Bureau (CFPB) has appointed to form its new Consumer Advisory Board (CAB), which will provide advice to CFPB leadership on a consumer financial issues and emerging market trends.

In a Wednesday CFPB announcement, Bill Bynum, CEO of Hope Enterprise Corp. and Hope Community CU, Jackson, Miss., was named vice president of the CAB. Laura Castro de Cortes, vice president of alternative financial services for Centris FCU, Omaha, Neb., was also named as a member.

The Credit Union National Association is working with the leagues to reach out to the credit union officials who were chosen, and will report to credit unions on how the CAB and the CFPB's Credit Union Advisory Council will operate.

The CAB is comprised of 25 members with expertise in consumer protection, financial services, community development, fair lending, civil rights, and consumer financial products or services. The CFPB said members also represent depository institutions that primarily serve underserved communities, and communities that have been significantly impacted by higher-priced mortgage loans.

CAB members will serve staggered three-year terms.

The first meeting of the CAB is scheduled to take place on Sept. 27 and 28 in St. Louis, Mo., and the panel is scheduled to meet at least twice a year. The panel will discuss, advise and consult with the bureau of emerging consumer financial issues.

The CFPB also announced the names of the 15 members of its new Credit Union Advisory Council. They are:

  • Bernard Balsis, IEG FCU, Hawaii;
  • Rose Bartolomucci, Towpath CU, Ohio;
  • Gary Bell, Cooperative FCU, California;
  • John Buckley, Gerber FCU, Michigan;
  • Carla Decker, District Government Employees FCU, Washington, D.C.;
  • Ron Ehrenreich, Syracuse Cooperative FCU, New York;
  • Kevin Foster-Keddie, Washington State Employees CU, Washington;
  • Mitchell Klein, Police and Firemen FCU, Pennsylvania;
  • Lily Lo, Northeast Community FCU, California;
  • Maria Martinez, Border FCU, Texas;
  • Marcus Schaefer, Truliant FCU, North Carolina;
  • Camille Shillenn, Unified People's CU, Wyoming;
  • Helen Godfrey Smith, Shreveport FCU, Louisiana;
  • Gregg Stockdale, 1st Valley CU, California; and
  • David Wright, Services Center FCU, South Dakota.
The bureau also released the names of its Community Bank Advisory Council on Wednesday.

2013 GAC site launched by CUNA

 Permanent link
WASHINGTON (9/13/12)--Registration for the Credit Union National Association's (CUNA) 2013 Governmental Affairs Conference (GAC) is now open, as CUNA today officially launched the online homepage for the conference, gac.cuna.org.

CUNA President/CEO Bill Cheney said the 2013 GAC "is all about making an impact, advancing our legislative agenda and removing regulatory barriers so that credit unions can be our members' best financial partners."

The theme of the 2013 GAC, Powerful Cause, Positive Effect, reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day, he added. CUNA's GAC is the credit union movement's premier political event and its largest national conference, each year providing more than 4,000 credit union executives and board members an opportunity to hear influential leaders from Congress, presidential administrations and federal regulatory agencies.

GAC attendees will also have the chance to meet directly with their members of Congress here in Washington. "It is critical that we bring the power of our grassroots cause to the Hill and ensure a stronger future for credit unions," Cheney said.

Recognized as the key conference to attend for political impact, credit union networking and industry updates, the GAC also offers a wide array of educational breakout sessions, the industry's largest exhibitor showcase, guest/family programs to tour Washington's sights, and special entertainment including an opening concert and the closing Gala Reception and Dance.

Keynote and other speakers and session topics will be announced in the weeks to come. For more information, follow the @CUNAverse twitter hashtag #CUNAGAC.

To register, use the resource link.

Hundreds of CUs accept NCUA LICU designation

 Permanent link
ALEXANDRIA, Va. (9/13/12)--The number of credit unions with low-income designations has increased by 553 following recent National Credit Union Administration (NCUA) outreach efforts, the agency said on Wednesday.

The NCUA in August notified 1,003 credit unions, indicating they are eligible for the low-income credit union (LICU) designation. Notified credit unions were offered a streamlined LICU application process, and the 553 credit unions noted above accepted the NCUA designation.

The addition of these new LICUs brings the total number of LICUs to 1,740.

The LICU notification initiative was incorporated into a relief and recovery package for drought-stricken states announced at the White House in early August, and 260 of the credit unions that accepted their designation were headquartered in drought-impacted states.

The NCUA in a release said the new LICUs serve 5.9 million members and hold more than $49 billion in assets, combined. According to the NCUA, 80% of these new LICUs have less than $100 million in assets, and the median asset size of these new LICUs is $24.6 million.

Credit unions that did not respond to this NCUA notification may still accept the LICU designation. They will have 30 days to do so, the NCUA said.

The LICU designation brings benefits that include the ability to accept supplemental capital and an exemption from the member business lending cap under certain circumstances. LICU-designated credit unions are also eligible for Community Development Revolving Loan Fund grants and low-interest loans and may accept deposits from non-members.

Inside Washington (09/12/2012)

 Permanent link
  • WASHINGTON (9/13/12)--The Federal Housing Finance Agency (FHFA) Monday reclassified the struggling Seattle Federal Home Loan Bank as "adequately capitalized" (American Banker Sept. 12). With the reclassification, the Seattle Bank is eligible to repurchase up to $25 million of excess capital stock per quarter at par ($100 per share). The bank said it plans to make its initial excess stock repurchase before the end of the month. The bank was classified as "undercapitalized" by FHFA in November 2009. It is still prohibited from redeeming stock or paying a dividend without approval from the FHFA …
  • WASHINGTON (9/13/12)--U.S. regulators will select the first non-bank firms likely to be classified as potential risks to the financial system, according to sources with knowledge of the plans. The Financial Stability Oversight Council will request confidential data from up to five U.S. firms it deems as systemically important this month, according to the sources, who would not identify themselves because the plans are not public (Bloomberg Sept. 12). Regulators will scrutinize the data to decide whether the companies should be subject to Federal Reserve supervision, including stress tests, higher capital levels and tougher liquidity requirements. Treasury Secretary Timothy F. Geithner told the House Financial Services Committee in July that insurer American International Group Inc. (AIG) is among the firms the council is considering

NEW CU reps among CFPB consumer advisory board members

 Permanent link
WASHINGTON (9/12/12, updated 1:10 p.m. ET)--Two credit union representatives are among the 25 consumer experts from outside the federal government that the Consumer Financial Protection Bureau (CFPB) has appointed to form its new Consumer Advisory Board (CAB), which will provide advice to CFPB leadership on a consumer financial issues and emerging market trends.

In a CFPB announcement today, Bill Bynum, CEO of Hope Enterprise Corp. and Hope Community CU, Jackson, Miss., was named vice president of the CAB. Laura Castro de Cortes, vice president of alternative financial services for Centris FCU, Omaha, Neb., was also named as a member.

The CFPB also announced the names of the 15 members of its new Credit Union Advisory Council. They are:
  • Bernard Balsis, IEG FCU, Hawaii;
  • Rose Bartolomucci, Towpath CU, Ohio;
  • Gary Bell, Cooperative FCU, California;
  • John Buckley, Gerber FCU, Michigan;
  • Carla Decker, District Government Employees FCU, Washington, D.C.;
  • Ron Ehrenreich, Syracuse Cooperative FCU, New York;
  • Kevin Foster-Keddie, Washington State Employees CU, Washington;
  • Mitchell Klein, Police and Firemen FCU, Pennsylvania;
  • Lily Lo, Northeast Community FCU, California;
  • Maria Martinez, Border FCU, Texas;
  • Marcus Schaefer, Truliant FCU, North Carolina;
  • Camille Shillenn, Unified People's CU, Wyoming;
  • Helen Godfrey Smith, Shreveport FCU, Louisiana;
  • Gregg Stockdale, 1st Valley CU, California; and
  • David Wright, Services Center FCU, South Dakota.
The bureau also released the names of its Community Bank Advisory Council. Read tomorrow's News Now for more.