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Filed on September 9, 2009, published the first business day after.
- Mortgage ‘cramdown’ issue rises from ashes in House
- 'Vibrant' CU community recognized by House
- CRA hearing set for next Wednesday
- FinCEN plan could reduce confusion about MSBs, CUNA says
- Inside Washington
- Southeast Corporate CEO will retire in 2010
- Mich. league-backed fin-lit bill passes state House
- Wash. league commends TARP special inspector
- Ensweiler wins Wegner Award
- Fire damages new Bellco CU building
- SECU partners with others to fight foreclosures
- Market News
- News of the Competition
- Consumers more willing to use PIN debit online
Mortgage ‘cramdown’ issue rises from ashes in House
WASHINGTON (9/10/09)—As recent reports predicted, House Financial Services Committee Chairman Barney Frank (D-Mass.) Wednesday announced his intention to get a mortgage "cramdown" bill through Congress next year.
In March, the House passed a bill that would have, in part, allowed bankruptcy court judges to force modifications in existing home loans, an action known as a "cramdown," but the Senate voted it down 51-45 in April.
To protect credit union interests, the Credit Union National Association (CUNA) strongly opposed the legislation, while concurrently working with supporters of the measure to ensure credit unions were not adversely affected if the legislation became law.
At a House Financial Services subcommittee hearing yesterday on the progress of the Obama administration's Making Home Affordable (MHA) loan modification program, Frank said, "The best lobbyists we have for (bankruptcy changes are) servicers that are not doing their job in trying to modify mortgages."
In outlining his plans for legislation, Frank said its reach would be limited to existing mortgages.
In an interview with The Huffington Post news website, posted Sept. 9, Frank said he intends to include bankruptcy provisions in the financial industry regulatory reform measure.
He added that in a recent meeting in Boston with Senate Majority Leader Harry Reid (D-Nev.), and Sens. Charles Schumer (D-N.Y.), Jack Reed (D-R.I.) and Tim Johnson (D-S.D.), the senators said they were ready for a major push to accomplish financial regulatory reform before the year ends.
'Vibrant' CU community recognized by House
WASHINGTON (9/10/09)—Credit Union National Association (CUNA) President/CEO Dan Mica Wednesday thanked the House for its recognition of the 75th anniversary of Federal Credit Union Act and the "vibrant" credit union community.
Mica said, "The House resolution is a fitting reminder that America's state- and federally chartered credit unions have a long and proud history of helping members improve their financial well being, especially in hard economic times whether during the Great Depression or in today's recessionary environment.
"The Federal Credit Union Act was instrumental in making this possible by opening the door to the development of a credit union movement that is truly national in scope. We are honored to have the House recognize all that this vitally important law enabled credit unions to achieve." The House passed H Res. 556 by voice vote Wednesday. The commemorative bill recognizes both credit unions' past and present service to the country through their service to credit union members.
The resolution notably commends credit unions for their "instrumental role in helping hard-working people in the United States recover after the Great Depression," as well as their continued exemplification of "the American values of thrift, self-help, and volunteerism, carving out a special place for themselves among the Nation's financial institutions."
In his statement, Mica extended CUNA's specials thanks to Reps. Jim Himes (D-Conn.), Rick Larson (D-Wash.), and Paul Kanjorski (D-Pa.) for offering the credit union resolution. Reps. Scott Garrett (R-N.J.), Earl Blumenauer (D-Ore.) and Ed Royce (R-Calif.) also spoke on the House floor in favor of the recognition.
The national recognition precedes CUNA's 75th anniversary celebration, which will be held in Estes Park, Colo. Sept. 14-17. A number of CUNA committee and board meetings will also take place during the celebration. National Credit Union Administration board member Gigi Hyland is also scheduled to speak during a meeting of board members.
CRA hearing set for next Wednesday
WASHINGTON (9/10/09)—The House Financial Services Committee set next Wednesday as the date for its exploration of Community Reinvestment Act (CRA) issues.
The committee Wednesday announced its hearing, titled "Proposals to Enhance the Community Reinvestment Act," will start at 10. a.m. (ET) Sept. 16.
Congress enacted the CRA in 1977 in response to banks' and thrifts' "redlining," or denying credit to lower-income and minority neighborhoods during the 1960s and early 1970s. The purpose was to ensure that federal and state-chartered commercial and savings banks were adequately meeting the financial service needs of all parts of the communities from which they draw deposits.
There have been past efforts to include credit unions under CRA, such asduring the passage of the Credit Union Membership Access Act (H.R. 1151).
The Credit Union National Association (CUNA) is opposed to any effort to include credit unions under CRA requirements.
"Credit unions, by their nature and mission of 'people helping people, already meet the financial needs of a broad spectrum of people that fall within their fields of membership, and play an active role in community development and growth," John Magill, CUNA senior vice president of legislative affairs, said Wednesday.
"Therefore, credit unions should not be subject to burdensome regulatory requirements when they are already meeting and exceeding the intent behind CRA," he added.
FinCEN plan could reduce confusion about MSBs, CUNA says
WASHINGTON (9/10/09)--There is significant confusion within the financial sector and in the marketplace regarding the types of businesses and activities that fall under the Financial Crimes Enforcement Network's (FinCEN's) money services business (MSB) rule and the Credit Union National Association (CUNA) supports FinCEN's attempts to minimize the confusion.
FinCEN has proposed an update to its MSB regulations and definitions to reflect its past guidance, rulings, current business operations, and evolving technologies, as well as to bring certain foreign-located MSBs with a U.S. presence under the purview of the regulations. The proposal also incorporates a minor change to the stored-value product rules and seeks comments for substantive changes envisioned for a later time.
In a Sept. 9 comment letter, CUNA said it generally agrees that FinCEN's proposed amendments to the MSB definitions will improve financial institutions' ability to determine what individuals and business activities are covered. The clarifications, CUNA added, will also help credit union and other financial institutions to manage risks involved in serving those individuals or businesses.
CUNA also generally supported FinCEN's review of a $1000 per-person, per-day threshold that is applied to certain categories of MSBs, but CUNA warned that substantially lowering the threshold could result in additional burdens for institutions.
"Lowering the threshold would increase the number of businesses and individuals designated as MSBs and thus increase the risk management burden for financial institutions. In most cases, MSBs would be classified in a higher risk category than most consumers and would require a more stringent level of risk management," the letter noted.
About the stored-value rules, CUNA said that it supports the agency's efforts to get financial institution comment, but believes the issue is more appropriately addressed in separate rulemaking.
To read CUNA's complete comments, use the resource link below.
Inside Washington
- WASHINGTON (9/10/09)--The Treasury is planning to encourage short sales and deeds with financial incentives, including a $1,000 success fee for servicers after a short sale is finished. The home seller would receive up to $1,500 for relocation expenses (American Banker Sept. 9). The plan, expected to be announced this month, aims to help troubled homeowners who are not eligible for the Obama administration's loan modification program. Short sales allow homeowners to sell for less than what is owed on the mortgage and are viewed as less expensive than foreclosures ...
- WASHINGTON (9/10/09)--The Federal Deposit Insurance Corp. (FDIC) Board adopted a notice of proposed rulemaking that phases out the debt guarantee component of the Temporary Liquidity Guarantee Program on Oct. 31. The FDIC seeks comment on whether a temporary, emergency facility should be left in place after the program expires. The FDIC has collected more than $9 billion in fees with the program and will use the money to offset resolution costs associated with bank failures, said FDIC Chairman Sheila Bair. The program was adopted by FDIC in October ...
- WASHINGTON (9/10/09)--An analysis of the Home Mortgage Disclosure Act (HMDA), which could be released this week, is expected to bolster the case for a consumer financial protection agency, according to financial observers (American Banker Sept. 9). They expect the data will indicate a wide discrepancy in loans to minorities because of the financial crisis. The discrepancy could be used by consumer advocates to push for a consumer agency. Past data has indicated that minorities receive higher cost loans than white borrowers. Rep. Brad Miller (D-N.C.) has said banks haven't used the HMDA data to improve lending, which is "proof" an agency is needed. However, Gil Schwartz, partner at Schwartz and Ballen LLP, said the data is often overstated ...
- WASHINGTON (9/10/09)--The Senate Tuesday confirmed George W. Madison as Treasury general counsel, where Madison will serve as a senior legal and policy adviser to the secretary and other officials. He also will lead the Treasury's legal division. Madison formerly served as executive vice president and general counsel of Teachers Insurance and Annuity Association, College Retirement Equities Fund ...
- WASHINGTON (9/10/09)--Vice President Joe Biden held a meeting Wednesday with The White House Task Force on Middle Class Families at Syracuse University in New York to discuss ways to help families save and pay for college. At the meeting, Biden asked Treasury to look into 529 plans and find ways to make them more effective for middle-class families. A 529 plan functions like a ROTH Individual Retirement Account and helps families save for college. Contributions are made with after-tax income. The task force also released a report diagnosing the existing barriers to higher education and ways for families to access higher education ...
Southeast Corporate CEO will retire in 2010
TALLAHASSEE, Fla. (9/10/09)--Southeast Corporate CEO Bill Birdwell announced he is proceeding with plans to retire when he turns 65 in February.
"Together we have built a solid management team at Southeast Corporate and they demonstrate to me and to members every day their high level of commitment and knowledge," Birdwell's said. "I am very proud of them and I know your needs will continue to be well-met."
"Finding a replacement for [Birdwell] has been a work in progress," said Southeast Board Chairman Tim McMurry, who reported that a search is actively underway to find his replacement.
McMurry called Birdwell a "true craftsman" of corporate credit unions with a deep devotion to the credit union movement. Birdwell's more-than-30-year's tenure in the credit union movement also includes service at Southwest Corporate, WesCorp and Volunteer Corporate.
"His leadership within the industry has had a positive impact and will be sorely missed," McMurry said.
The right replacement will be capable of positioning Southeast Corporate to continue to serve credit unions in the future, McMurry said. The board is reviewing candidate qualifications and hopes to make a decision by year-end.
Mich. league-backed fin-lit bill passes state House
PLYMOUTH, Mich. (9/10/09)--A bill that would allow Michigan high school students to take a personal finance course in place of a second algebra class passed the Michigan State House Sept. 3. The bill is backed by the Michigan Credit Union League.
The bill, sponsored by State Rep. Joel Sheltrown (D-West Branch), would allow students to replace the required second algebra class with a personal finance course. The bill opens the door for young people to receive lessons in money management, the league said (Michigan Monitor Sept. 8).
High school students in Michigan must complete algebra I, geometry, algebra II and another math credit to graduate. Last year, a law passed to allow a personal finance course to count as the fourth math credit. Sheltrown's legislation takes the change one step further, the league said.
"We're hopeful the Senate will move their version of the bill and that it will ultimately land on the governor's desk, so more students can have the option of receiving money management skills that will be necessary as they get older," said Marcia Hune, league vice president of government and public affairs.
A Senate version of the bill, sponsored by State Sen. Wayne Kulpera (R-Holland), is on the Senate floor.
Wash. league commends TARP special inspector
FEDERAL WAY, Wash. (9/10/09)--The Washington Credit Union League last week commended the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Neil Barofsky, for asserting his office's autonomy from the U.S. Department of Treasury, in tracking money spent to bail out the financial system through TARP.
The letter called the move "essential" to investigations and audits of the biggest bank bailout in history.
The letter was written on the heels of Treasury withdrawing a request to the Justice Department that sought a legal opinion on how much independence is given to the Special Inspector General, who tracks money spent through TARP to bail out the financial system.
"The stand taken by the Special Inspector General is important for institutional independence as industry leaders devise a plan for prosperity in the 21st century," said league President/CEO John Annaloro.
Meanwhile, Barofsky told members of Congress in a letter that Treasury's withdrawal of its request for an opinion is acknowledgement of SIGTARP's independence.
The letter to Barofsky also conveyed appreciation from Washington credit unions for the achievements made to date and also the important role the Special Inspector General is fulfilling in the administration of the U.S. government's efforts to rebuild the financial sector.
Ensweiler wins Wegner Award
FARMERS BRANCH, Texas (9/10/09)--Texas Credit Union League President and Credit Union Development Educator Dick Ensweiler will receive the 2010 Wegner Award for Individual Achievement at this year's Credit Union National Association (CUNA) Governmental Affairs Conference (GAC).
The award will be one of four presented at the 22nd Annual Wegner Awards Dinner hosted by the National Credit Union Foundation (NCUF) Feb. 22. The gala will take place at the Grand Hyatt Washington on the Monday night of the GAC.
Ensweiler embodies timeless qualities of U.S. credit union movement founder Ed Filene, who always urged credit union advocates to "Keep purpose constant," said NCUF Awards and Recognition Committee Chairman Bob Schumacher.
"Dick Ensweiler is a rare individual who has kept his purpose constant while advancing his career all the way from a teller at a small credit union to the chairman of our largest trade association," Schumacher reflected. "Every organization Dick has touched has grown to become more successful. His secret to success is simple: Live the credit union philosophy of ‘people helping people;' practice all seven cooperative principles; and always act in the best interests of your members."
"I have seen Dick's Midas touch at work many a time," observed Harriet May, president/CEO of Greater El Paso's CU. "Dick came to the Texas Credit Union League at the lowest point in its history. Not only did Dick restore trust and belief in the organization, he took it to new levels of respect and admiration within the credit union movement.
"His strategy: Continue to share and live the vision of the credit union movement; exhibit strong, tireless, and inspiring leadership; and get people involved at all levels," she added.
Ensweiler has been involved with:
- American Association of Credit Union Leagues;
- Credit Union House;
- Credit Union Legislative Action Council;
- CUNA;
- CUNA Mutual Group;
- CUNA Strategic Services;
- Illinois Credit Union Foundation;
- Illinois Credit Union League;
- Illinois Youth Involvement Council;
- League InfoSight;
- Michigan Credit Union League;
- Minnesota Credit Union League;
- NCUF;
- Southwest Corporate FCU;
- Southwest CUNA Management School;
- Texas Credit Union League, and;
- World Council of Credit Unions (WOCCU).
He also helped advance many programs, including:
- Credit Union Development Education, NCUF's program that trains credit union leaders to leverage the cooperative business model as a competitive advantage;
- Image Survey, the Texas CU League's benchmark/planning tool to improve services based on members' needs;
- International Remittance Network, WOCCU's affordable alternative to expensive country-to-country wire transfers;
- Juntos Avanzamos (Together We Advance), the Texas CU League's program to help credit unions reach first-generation immigrants;
- Loss Avoidance Alert System, the Internet application that informs credit unions with near-immediate updates on fraud and other illegal financial activities;
- Members Financial Services Network, CUNA Mutual Group's comprehensive investment management program; and
- Richard L. Ensweiler Fund, a special community investment fund that pools dividends to educate early-generation Hispanics about the benefits of credit unions.
Fire damages new Bellco CU building
DENVER (9/10/09)--A fire that started on Sunday night damaged a new branch site of Bellco CU in Grand Junction, Colo., according to local media.
The fire started in an air conditioner on the roof of the building. A passing motorist saw the flames around 11:30 p.m. Sunday night and called the fire department. The Grand Junction Fire Department was able to put out the fire before it caused serious damage (Grand Junction Daily Sentinel Sept. 7).
The credit union building was being remodeled from a restaurant during the past three months, but will open on time despite the fire, said Nancy Hill, vice president of Bellco's Western Slope branch.
The credit union's interior was not affected and there was no smell of smoke. Damages are estimated at $100,000, but the estimate may be high, the newspaper said.
SECU partners with others to fight foreclosures
RALEIGH, N.C. (9/10/09)--State Employees' Credit Union (SECU) and its members are partnering with the Center for Responsible Lending, the North Carolina Commissioner of Banks (NCCOB) and Capital Broadcasting Corporation to launch a major media effort to reach homeowners at risk of foreclosure.
The "Fight NC Foreclosure" campaign aims to educate the public on the foreclosure crisis and provide guidance on where to turn for help. The campaign will include repeated public service announcements (PSAs) on prime-time television, combined with a visible presence on a website.
"Fight NC Foreclosure" is set to launch with a press conference Tuesday and run through December.
The PSAs will highlight the State Home Foreclosure Prevention Project, bringing North Carolinians an awareness of resources available to prevent foreclosures. The project aims to increase the percentage of North Carolina homeowners who save their homes, and also prevent consumers from becoming victims of foreclosure scams, especially scams affecting those with subprime mortgages.
While the credit union has never, and will never, originate subprime loans, SECU, as a non-profit cooperative, feels strongly about helping North Carolinians who may be in subprime situations, SECU said. And, SECU will assist its own members who have experienced loss of income in recent months, the credit union added.
In February, SECU launched a Mortgage Assistance Program (MAP), which offers members an opportunity to meet in person with a senior officer of SECU and develop an individualized financial plan if members have concerns about future payments on their SECU mortgage.
Options in MAP include mortgage loan extensions, mortgage loan modifications or refinances, and partial payment alternatives. Budgeting, financial counseling and overall debt restructuring are also part of the MAP initiative--free to the SECU membership.
"Based on our most recent data, we estimate that one out of every 12 mortgage-holders in North Carolina will face foreclosure between now and 2013 unless drastic steps are taken to reverse the trend," said Susan Lupton, senior policy associate with the Center for Responsible Lending. "The ‘Fight NC Foreclosure' outreach campaign will hopefully make a tremendous difference in educating those who desperately need the help to stay in their homes. We are extremely pleased to have SECU as a partner on this campaign."
Mark Pearce, NCCOB deputy commissioner added: "Foreclosures don't have to happen. Even if our state's citizens have experienced hard times, they may be able to keep their home if they take advantage of available resources. The state of North Carolina has a network of free counselors and partners like SECU, who have processes in place to help homeowners avoid foreclosure."
"SECU understands the importance of helping members improve their financial lives--it's the mission of SECU and goes hand in hand with the ‘People Helping People' philosophy of the Credit Union," said Phil Greer, senior vice president of SECU's Loan Administration department. "And even if our cooperative was not part of the subprime debacle, we must help to educate all North Carolinians on the resources available to them during these difficult economic times.
"The ‘Fight NC Foreclosures' campaign is a great way to get the word out to all North Carolinians, letting them know of available assistance," he added. "We strongly encourage all SECU members who are struggling with possible foreclosure or loss of income to reach out to the Credit Union. We're here to help."
Market News
MADISON, Wis. (9/10/09)
- Gross hiring activity in July remained weak, according to the Job Openings and Labor Turnover Survey conducted by the Bureau of Labor Statistics. Hiring rose slightly to 4 million new hires up from 3.9 million in June. The number of job openings fell in July to about 2.4 million--about half the amount available earlier in the decade during the economic expansion--from roughly 2.5 million in June. The number of people who left their jobs remained steady at 4.3 million. Regionally, the job openings rate was highest in the Northwest (2%) although it also fell the most there--from 2.4%. The job openings rate was lowest in the South and West--1.7% (Moody's Economy.com Sept. 9) ...
- The U.S. dollar fell to its lowest level in nearly a year Wednesday against currencies of six major U.S. trading partners because record-low borrowing costs incentivized investors to sell dollars and purchase higher-yielding assets, analysts said. Investors are using dollars--which became the cheapest funding currency in London this week--to fund their risky investments, said Bilal Hafeez, the London-based global head of foreign-exchange strategy for Deutsche Bank AG--the largest currency trader in the world. Many investors are borrowing dollars for the purpose of investing them in other markets, he added (Bloomberg.com Sept. 9) ...
News of the Competition
MADISON, Wis. (9/10/09)
- The Market Composite Index--a measure of mortgage loan application volume--increased 17% for the week ending Sept. 4 on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index rose 15.8% compared with the previous week and 64.5% compared with the same week one year earlier. The index is part of the Weekly Mortgage Applications Survey released Wednesday by the Mortgage Bankers Association. In the largest jump since mid-March, the Refinance Index rose 22.5% from the previous week. The seasonally adjusted Purchase Index increased 9.5% from one week earlier--the largest gain since early April. For Lower Rates Spur Mortgage Applications in Latest MBA Weekly Survey, use the link ...
- Lawsuits against creditors and collection firms leapt 46% between Aug. 16 and Aug. 31 with 513 collectors being sued, according to the Web Recon LLC, which tracks lawsuits individual consumer statutes--primarily the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Truth-in-Lending Act. To date this year, 6,160 industry-related lawsuits were filed in the U.S.--including 5,111 alleging Fair Debt Collection Practices Act violations and 853 claiming Fair Credit Reporting Act violations (Collections & Credit Risks via American Banker Sept. 9) ...
Consumers more willing to use PIN debit online
ATLANTA (9/10/09)--Consumers are more willing to use their debit card and personal identification numbers (PIN) when paying online, according to a payment software solutions provider.
About 56% to 60% of consumers that are presented with Acculynk's Pay Secure solution choose to complete their purchase online with a PIN entry instead of processing the transaction as credit. Of the consumers that choose to process the transaction as credit, only 10% use the PIN pad, Acculynk said.
A study by Acculynk also found that 80% of participants said they would use PaySecure when presented as a payment option. Consumers also viewed PaySecure as a more secure payment method, and 48% said they would purchase more often on the Internet if they could use PaySecure.
"Usage could actually increase trust in the Internet purchasing process," Acculynk said in a white paper, "PaySecure: Tracking to Become a Leading Online Payment Method."
About 79% of consumers also feel more secure using their debit card online with PaySecure than without, according to a Javelin Research survey.
PaySecure was commercially introduced in March and included several online merchants and electronic funds transfer networks, including Credit Union 24. The solution was designed to mimic the PIN entry process at the retail point-of-sale by giving consumers the option of processing the transactions as debit or credit.
Acculynk, based in Atlanta, provides software solutions for online transactions.
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