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Hike the Hill Visits Backed Online Advocacy Efforts Last Week

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WASHINGTON (9/16/13)--
Click to view larger image League  of Southeastern Credit Unions President/CEO Patrick La Pine, right, speaks during a group meeting with National Credit Union Administration board member Michael Fryzel. (Photo provided by the League of Southeastern Credit Unions)
While credit unions and members across the country made online credit union tax advocacy a priority last week, state credit union leagues representing Alabama, California, Florida, Nevada, North Carolina, Oregon, South Carolina, Washington and West Virginia were backing them up on the ground by taking part in the first round of the Credit Union National Association's Fall Hike the Hill campaign.

"Credit union members who were in town reported good news from their meetings, and many legislators said they were hearing the 'Don't Tax My Credit Union' message loud and clear," CUNA Grassroots Manager Kristen Prather said Friday.

The LSCU & Affiliates fall Hike the Hill included meeting with lawmakers and visiting the National Credit Union Administration headquarters. During meetings on the Hill, Alabama and Florida credit unions continually heard that the Don't Tax My Credit Union message is working and to keep it up.

Click to view larger image Sen. Joe Manchin (D-W.Va.) speaks before West Virginia credit unions during their Hike the Hill visit last week. West Virginia Credit Union League President Ken Watts, seated at front, right table, said this year's Hike took on added importance since it was taking place at a high point of the Don't Tax My Credit Union campaign. Manchin also acknowledged the good work credit unions do in their communities and strongly felt credit unions would be key to the country's further economic recovery, Watts told News Now. See related story, Grassroots At Work: N.J., W.Va. Lawmakers Speak Out For Tax Status. (Photo provided by the West Virginia Credit Union League)
The League of Southeastern Credit Unions reported that the meetings, which included talks with four senators and 34 representatives, were productive. A number of lawmakers told the league they are hearing credit unions loud and clear on the tax issue, and urged credit union supporters to keep up their grassroots efforts. Lawmakers also talked about their credit unions and their understanding of the role that credit unions play in their local communities. The Alabama and Florida group also met with NCUA board members Michael Fryzel and Richard Metsger during the week, discussing regulations and the Consumer Financial Protection Bureau.

"Quick, Focused, Efficient" was the mantra for Oregon and Washington credit union representatives as they hiked last week. (Anthem Sept. 10). Northwest Credit Union Association Vice President for Legislative Advocacy Jennifer Wagner noted that "advocacy is all about relationships," and the recent Hike the Hill trip gave Oregon and Washington credit unions another opportunity to nurture their relationships with members of Congress "and remind them about the needs and challenges of the credit unions in their districts and of our members, who are their constituents."

"Advocating at the federal level is a process, not an event," Wagner said, noting that legislators do make decisions that can have extraordinary implications for credit unions. "It is imperative that our senators and representatives understand the unique structure and needs of credit unions," she added.

All in all, 20 leagues representing 28 states are carrying the Don't Tax My Credit Union message to Capitol Hill in September and October. This week, Georgia, Kentucky and Idaho credit union representatives will be in town.

Lawmakers Thanks Cordray For Privacy Notice Remarks

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WASHINGTON (9/16/13)--Reps. Blaine Luetkemeyer (R-Mo.) and Brad Sherman (D-Calif.) quickly followed up on Consumer Financial Protection Bureau Director Cordray's remarks during a hearing last week that his agency will work with legislators to address privacy notification issues through the regulatory process.
Cordray made his remarks as he presented his agency's semiannual report before a House Financial Services Committee hearing. (News Now Sept. 12) At that time in response to lawmakers' inquiries Cordray said, "…our sense is there's a lot we can do by regulation" regarding privacy notifications.
Leutkemeyer and Sherman, co-sponsors of a privacy notification bill (H.R. 749) that passed the House last March, also encouraged Cordray to urge the Senate to pass its version of privacy notice legislation (S. 635).
Both the House and Senate bills would eliminate a requirement that privacy notices be sent on an annual basis. The bills would allow the notices to be sent only when the privacy policy of a financial institution has changed.

In their Sept. 13 letter to Cordray, Leutkemeyer and Sherman thanked the CFPB director for his support of the "common sense" regulatory reforms. "We agree with your assertion that additional disclosures do not necessarily translate to benefits for consumers and greatly appreciate your willingness to provide relief on this front," the congressmen wrote.
The Credit Union National Association supports the privacy notification bills because they would streamline the regulatory burden on credit unions by reducing the credit union staff  time and resources diverted that could be used for more important services to members. The bills would ensure that when a consumer receives a privacy notification, it has significance and is not redundant, CUNA has noted.

Cheney Report: Impressive CU Advocacy Efforts Must Continue

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WASHINGTON (9/16/13)--Last week's strong advocacy efforts, made on "Don't Tax Tuesday" Round Two, were impressive, but Credit Union National Association President/CEO Bill Cheney said credit unions must stay engaged and be relentless on the advocacy front to ensure the credit union tax status is not targeted in any draft legislation that would become the basis for all future tax reform discussion.
Last week's Don't Tax Tuesday efforts were particularly timely, Cheney wrote in the latest edition of The Cheney Report, "because the key lawmakers spearheading the reform effort continue to say that there will be a draft tax proposal this fall." House Ways and Means Committee Chairman Dave Camp (R-Mich.) has told his fellow lawmakers he is sticking with his tax reform timeline of "this year." And, Cheney noted, on the Senate side, recent media reports indicate the Finance Committee may approach tax reform in pieces, or as a white paper, rather than as a comprehensive bill.
Tuesday's major social media push used Twitter, Facebook, as well as CUNA's own websites--in Spanish and English--to generate over 5,000 tweets, 600 Facebook posts and 8,000 e-mails to lawmakers. Overall, more than one million Twitter users were potentially exposed to the #DontTaxMyCU campaign yesterday, and 4,800 individual tweets were specifically aimed at the Twitter accounts of Members of Congress.
Credit unions will need to keep up this good work to repel bank attacks against their tax status. While bankers have tried to outmuscle and outmaneuver credit unions with paid advertising in Washington, D.C., papers, "those paid ads paled in comparison to our grassroots efforts," Cheney said.
"We cannot let the bankers, who are getting more active in attacking our exemption, out-message us on [Capitol Hill]," Cheney wrote. "I can assure you that with your support that will not happen," he said.
This week's edition of The Cheney Report also details:
  • The crucial role that states played in generating lawmaker support for credit unions;
  • The results of Thursday's National Credit Union Administration board meeting; and
  • The positive press coverage that CUNA's Women's Finance Survey has generated.
Each Friday, The Cheney Report provides a valuable window into CUNA's actions on behalf of member credit unions and reinforces the value of CUNA membership. To sign up for The Cheney Report, click the resource link below and use the "subscribe" tab on the right of the page.

Past issues of The Cheney Report are also archived on

NCUA Releases New Training Modules For CU Supervisors

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ALEXANDRIA, Va. (9/16/13)--Small and low-income credit union supervisory committee members have a new resource to help them better grasp the roles and responsibilities of their positions. The National Credit Union Administration last week released a series of online supervisory committee training modules.

The agency is "committed to providing training and support to small and low-income designated credit unions so they are able to continue to meet the needs of their members," NCUA Chairman Debbie Matz said in a release.

Matz said the NCUA chose supervisory committee members as a target audience because of the critical role these committee members play in ensuring the safety and soundness of the credit union. "Our intent is that by providing free, accessible training it will be easier to recruit volunteers and increase the effectiveness of committee members," Matz added.

The video series is broken up into six modules of 10 minutes or less.

Topics addressed include monitoring management activities, annual audits, verification of member accounts, and handling member complaints. The training resources were created by the NCUA's Office of Small Credit Union Initiatives.

More training modules will be released in 2014, the NCUA said.

CFPB Releases Mortgage Final Rule Changes

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WASHINGTON (9/16/13)--The Consumer Financial Protection Bureau on Friday released another final rule amending its Ability-to-Repay, Mortgage Servicing and Mortgage Loan Originator Rules, which were originally finalized in January of this year.

The CFPB in a release said the changes answer questions that have been identified during the implementation process. The rule "amends and clarifies parts of our mortgage rules to ensure a smoother implementation process, which is helpful to both businesses and consumers," CFPB Director Richard Cordray said.

A number of changes CUNA sought were addressed by the CFPB.  The agency said that the final rule changes:
  • Exempt all small creditors, even those that do not operate predominantly in rural or underserved counties, from the ban on high-cost balloon mortgages, as long as the loan meets certain restrictions;
  • Make it easier for certain small creditors to continue qualifying for an exemption from a requirement to maintain escrows on certain higher-priced mortgage loans;
  • Clarify that credit insurance premiums are "financed" by a creditor when the creditor allows the consumer to defer payment of the premium past the month in which it is due;
  • Explain how the rule applies to "level" or "levelized" premiums, where the monthly premium is the same each month rather than decreasing along with the loan balance;
  • State that servicers will be allowed to send certain early delinquency notices required under state law to borrowers that may provide beneficial information about legal aid, counseling, or other resources;
  • Outline specific procedures for servicers to follow if they fail to identify and inform a borrower upon an initial review that certain information is missing from a borrower's loss mitigation application;
  • Detail modifications that make it easier for servicers to offer short-term forbearance plans for delinquent borrowers who need only temporary relief without going through a full loss mitigation evaluation process. Servicers, upon reviewing an incomplete loss mitigation application, may provide a 6-month forbearance to a borrower who is suffering a short-term, temporary hardship;
  • Provide more specific details on how to inform borrowers about the address for error resolution documents by listing it on certain documents, such as an initial notice and a periodic statement or coupon book, if applicable;
  • Clarify the circumstances under which a loan originator's or creditor's administrative staff acts as loan originators;
  • Clarify what compensation must be included in certain thresholds for points and fees under the Ability-to-Repay and high-cost mortgage rules for retailers of manufactured homes and their employees, and when such employees may be considered loan originators; and
  • Move the effective date for certain provisions of the Mortgage Loan Originator Compensation final rule from Jan. 10, 2014 to Jan. 1, 2014, in order to simplify compliance since compensation plans, training, and licensing and registration are often structured on an annual basis.
For a CFPB release on the final rule, use the resource link. CUNA members can access the last link for a compilation of CUNA resources available to help credit unions work through what all the regulations require of them.

CUNA Urges NCUA To Speak Up On FASB Accounting Issue

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WASHINGTON (9/16/13)--The Credit Union National Association strongly supports a pending Financial Accounting Standards Board proposal to redefine "public business entities," and CUNA in a Friday letter to the National Credit Union Administration called on the agency to support this proposal "for all credit unions, regardless of size and charter type."

"We have been urging FASB to consider this issue for quite some time and are strongly supporting the proposal," CUNA President/CEO Bill Cheney wrote in the letter to the agency. "We believe this proposal indicates that FASB appreciates key distinctions between organizations such as credit unions and others that are publicly traded, and that [U.S. Generally Accepted Accounting Principles] GAAP reporting requirements can and should be tailored to reflect those differences,"

The proposal would allow credit unions and other nonpublic business entities to use accounting and reporting alternatives under GAAP. The proposal would define a public business entity as an organization that meets any one of five criteria, such as requiring  the entity to file financial statements with a regulator in preparation of sale of securities.  As proposed, credit unions would not be included within the definition of a public business entity, which is an aspect of the proposal that CUNA supports.

Overall, the FASB proposal could result in more flexible accounting requirements for nonpublic business entities.

The NCUA's views on this issue are very significant because under the proposal, prudential regulators such as NCUA would play a key role in permitting their regulated entities to modified standards that would still qualify as GAAP, the letter said.

For the full CUNA letter, use the resource link.

NCUA Activates Disaster Relief Policy after Colorado Flooding

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ALEXANDRIA, Va. (9/16/13)--The National Credit Union Administration is encouraging credit unions in areas distressed by severe flooding in Colorado to make prudent loans with special terms and reduced documentation for members affected by the disaster, among other things.
Modifications may include extending the terms of loan repayments, restructuring a borrower's debt obligations, and easing credit terms for new loans to certain borrowers, consistent with prudent practices.
The agency invoked its disaster policy over the weekend and in additions to encouraging special loan terms, the NCUA will, under the disaster policy and where necessary:
  • Reschedule routine examinations of affected credit unions, if necessary;
  • Guarantee lines of credit for credit unions through the Share Insurance Fund; and
  • Make loans to meet the liquidity needs of member credit unions through the Central Liquidity Facility.
The agency reminded that federal credit unions can extend their assistance beyond their own membership and may also provide assistance to other credit unions, their members, and non-members in the affected areas.  They may extend:
  • Emergency financial services for non-members, including check cashing, access to ATM networks or other services to meet short-term emergency needs of individuals in the affected areas can be provided under the authority to engage in charitable activities. Federal credit unions providing services on this charitable basis may not impose charges for services that exceed their direct costs; and

  • A federal credit union may provide services to other credit unions that it is authorized to perform for its own members or as part of its operations. This activity is part of a federal credit union's incidental powers, so it may impose charges for those services.
Credit unions in need of NCUA assistance dealing with members affected by the flooding should contact their primary supervisory official.
The NCUA in its weekend release also said its examiners are already surveying credit unions operating in affected areas. Some credit unions and branches in locations affected by the flooding may have curtailed hours or services, the agency noted, and added that credit union members in these areas should contact their credit unions or check their websites for the latest information.
Share deposits at federally insured credit unions remain protected up to $250,000 by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund is backed by the full faith and credit of the U.S. Government.
See News Now's related story, "Colorado CUs Closed In Flash Floods."