News Now Archive
Published on January 16, 2013.
- NEW: House Speaker John Boehner to address CUNA's 2013 GAC
- CUNA asks CFPB to use its 'considerable latitude' to set remittance compliance date
- NCUA approves high-risk mortgage appraisal rules
- Financial services, Ways and Means subcommittee spots are being filled
- Reminder: Matz, Cordray available to CUs in Feb. 5 webinar
- Re-introduced Ross bill has no CU language
- Inside Washington
- YL4Kids seeks advocates under 40
- Filene pilot to improve marketing efficiency, effectiveness
- Enterprise Car Sales generates $380M in CU auto loans
- Virginia league to relocate some jobs to Richmond
- MnCUN adds to shared branching network
- Qualstar CU pays out $2.5 million dividend
- CU System briefs
- Market News
- News of the Competition
- Ten steps to fiscal fitness in 2013
- H&FF Radio reviews estate planning, loans to adult children
- CUNA Lending Compliance School dates set
NEW: House Speaker John Boehner to address CUNA's 2013 GAC
WASHINGTON (1/16/13, UPDATED 11:35 a.m. ET)--Speaker of the House Rep. John Boehner (R-Ohio) will address the Credit Union National Association's 2013 Governmental Affairs Conference (GAC) in Washington on Feb. 26.
"We are very honored to again have Speaker Boehner join us at the GAC," said CUNA President and CEO Bill Cheney. "We know he has a full agenda in the House with debt ceiling, sequestration and government funding measures all coming to the fore near the time of our conference.
"The Speaker's acceptance of our invitation is indicative of his appreciation for all credit unions do to ably serve their members in Ohio and nationwide."
Speaker Boehner first addressed CUNA's GAC in 2011. He is one of two sitting Speakers of the House to address the credit union movement's premier national conference. Then-Speaker Newt Gingrich spoke at the GAC in February 1998 during CUNA, league and credit unions' successful fight to enact H.R. 1151, the Credit Union Membership Access Act.
Sen. Mark Udall (D-Colo.), champion of credit union member business lending legislation in the Senate, also has been added to the growing roster of Washington power players who will address the GAC this year. Udall will speak Wednesday, Feb. 27.
More congressional and regulatory speakers will be announced in coming weeks.
CUNA asks CFPB to use its 'considerable latitude' to set remittance compliance date
WASHINGTON (1/16/13)--The Consumer Financial Protection Bureau (CFPB) should give credit unions and other financial institutions a minimum of one year to implement international remittance regulations, the Credit Union National Association has recommended.
"The agency has considerable latitude in determining a final compliance date," CUNA Deputy General Counsel Mary Dunn noted in a comment letter Tuesday. A delayed date "will help facilitate compliance for credit unions, particularly those who work with vendors, while minimizing regulatory burdens on credit unions," the letter added.
The CFPB recently proposed extending the remittance rule implementation period until 90 days after the revised final rule is released. The rule, required by the Dodd-Frank Wall Street Reform Act, was scheduled to take effect on Feb. 7.
The CUNA letter said this delay is welcome and thanked the agency for addressing some of the concerns that CUNA, CUNA's International Remittances Working Group, leagues and credit unions have raised regarding the remittance regulations.
Preliminary results from a CUNA survey of remittance providing credit unions has found that more than 40% of respondents will need about 12 months to implement the required changes.
Dunn said credit unions will need the extra deadline leeway to:
The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year.
CFPB regulatory counsel Eric Goldberg summarized the remittance proposal and answered credit union questions during a Monday teleconference hosted by CUNA. CUNA Director of Compliance Information Valerie Moss has highlighted noteworthy items from the teleconference in a CUNA CompBlog post.
CUNA continues to seek comments from credit unions and will be filing a second comment letter on additional substantive changes; comments on those revisions are due to the CFPB by Jan. 30.
For the comment letter, audio of the teleconference and a blog post on the teleconference, use the resource links.
NCUA approves high-risk mortgage appraisal rules
WASHINGTON (1/16/13)--The National Credit Union Administration and federal bank regulators have approved rules that will require lenders offering higher-risk mortgages to use licensed or certified appraisers.
The appraisers will need to prepare written reports, based on physical inspections of a home's interior, when they determine the value of a given home.
Mortgage lenders will also be required to provide homebuyers with a free copy of the resulting home appraisal report. If the seller of a given home has purchased the home for less than the current sale price within the last six months, an additional appraisal document will also need to be provided to the homebuyer. The document will need to detail the difference in sale prices, any changes in market conditions, and any improvements that have been made to the property since it was purchased by the current owner. This requirement is an attempt to address fraudulent property flipping.
High-priced mortgages will be considered non-qualified residential mortgages that are secured by a principal dwelling with annual percentage rates that exceed the average prime offer rate by 1.5% for first-lien loans, 2.5% for first-lien jumbo loans, and 3.5% for junior lien loans.
Safe harbors and exemptions will be provided in some cases.
The higher-risk mortgage appraisal requirements will go into effect on Jan. 18, 2014. The Credit Union National Association is analyzing the NCUA regulations and will post a summary soon.
The new mortgage appraisal requirements are mandated by the Dodd-Frank Wall Street Reform Act. They are a joint rulemaking effort between the NCUA, Consumer Financial Protection Bureau (CFPB), Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and other federal financial agencies.
For the full regulation, as approved by the FDIC on Tuesday, use the resource link.
The CFPB's version of these regulations will likely be released when that agency holds an Atlanta, Ga. mortgage issues hearing on Jan. 17. Pam Davis of Delta Community CU, Atlanta, Ga., and other credit union representatives from that state will join Georgia Credit Union League leaders at that hearing. Davis is set to speak on behalf of her credit union and CUNA during the hearing.
Financial services, Ways and Means subcommittee spots are being filled
WASHINGTON (1/16/13)--Several leadership and membership slots for House Financial Services and Ways and Means subcommittees were filled on Tuesday.
House Financial Services Committee Ranking Minority Member Maxine Waters (D-Calif.) named the following representatives to serve as ranking House Financial Services subcommittee members:
House Financial Services Chairman Jeb Hensarling (R-Texas) announced subcommittee leadership late last month. (See Dec. 27 News Now story: More named to House Financial Services positions)
House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Sander Levin (D-Mich.) also announced their respective subcommittee leaders.
Rep. Charles Boustany (R-La.) will lead the Subcommittee on Oversight, and Rep. John Lewis (D-Ga.) will serve as ranking member. Rep. Pat Tiberi (R-Ohio) will lead the Subcommittee on Select Revenue Measures, with Rep. Richard E. Neal (D-Mass.) serving as ranking member. These subcommittees are of interest to credit unions: the oversight subcommittee investigates the tax exempt sector, and the select revenue measures subcommittee is in charge of tax reform.
Leaders for social security, trade, human resources and health subcommittees were also named. Levin also released full Democratic subcommittee rosters, but Camp said the remaining Republican subcommittee members will be named once the remaining vacant Republican position of the full Ways and Means Committee has been filled.
For more on the subcommittee selections, use the resource links.
Reminder: Matz, Cordray available to CUs in Feb. 5 webinar
ALEXANDRIA, Va. (1/16/13)--There is still time for credit unions to register for a Feb. 5 webinar that will bring National Credit Union Administration Chairman Debbie Matz together with Consumer Financial Protection Bureau Director Richard Cordray to discuss recent developments.
The NCUA-sponsored session will feature a broad discussion of such topics as the CFPB's recently finalized Ability-to-Repay rule and a related proposed rule. That proposed rule would provide an alternative definition of Qualified Mortgage potentially applicable to thousands of credit unions with $2 billion or less in assets that originate 500 or less mortgages annually.
Webinar participants will be able to type in questions about any topic related to the credit union industry or the CFPB during the webinar. They also can submit advance questions at WebinarQuestions@ncua.gov. The subject line of the email should read, "NCUA-CFPB Town Hall."
Use the resource link below to register for the 3 p.m. (ET) webinar.
Re-introduced Ross bill has no CU language
WASHINGTON (1/16/13)--Rep. Dennis Ross (R-Fla.) late Monday re-introduced his bill to reduce the federal budget deficit. As he promised the Credit Union National Association late last year, Ross corrected an inadvertent drafting error found in the original bill that threatened the federal income tax exemption for federal and state-chartered credit unions.
"Rep. Ross has a strong relationship with Florida credit unions and has been very open to us at CUNA. In fact, we met with his staff as recently as two weeks ago--the first day of the new Congress--to touch base with him and reiterate the value that credit unions bring to consumers," John Magill, CUNA executive vice president of governmental affairs said Tuesday.
"Exclusion of the credit union tax status from this legislation is consistent with Rep. Ross' statements to CUNA following the introduction of similar legislation in the 112th Congress. He remains a friend to credit unions and we look forward to working with him as the discussion about the federal budget and tax reform goes forward," Magill added.
Last year, CUNA identified language within the original bill (H.R.6474) that threatened credit unions' tax status. CUNA and the League of Southeastern Credit Unions immediately arranged meetings with Ross's office and a correction was promised.
As required by the rules of the U.S. Congress, any bill still in play when a session adjourns must be re-introduced in the new Congress to be considered. Ross assured CUNA that the bill's language would be corrected before being re-introduced this year.
- WASHINGTON (1/16/13)--Starting in March, the Federal Housing Finance Agency will have a new as deputy director of the Division of Housing Mission and Goals. Acting FHFA Director Edward DeMarco Tuesday announced the appointment of Sandra Thompson to that post. She will oversee FHFA's housing and regulatory policy, financial analysis, and policy research and analysis of housing finance and financial markets. Thompson joins FHFA from the Federal Deposit Insurance Corporation (FDIC), where she has served in various capacities over the past 23 years. During her time at the FDIC Thompson led the agency's examination and enforcement program for risk management and consumer protection at the height of the financial crisis. She also led the FDIC's outreach initiatives in response to a crisis of consumer confidence in the banking system …
YL4Kids seeks advocates under 40
SALT LAKE CITY (1/16/13)--Volunteers are being sought for an "under 40" national advisory board of Credit Unions for Kids called the "Young Leaders for Kids Board (YL4Kids)."
The purpose of YL4Kids is to create, grow and inspire Credit Unions for Kids enthusiasts among the next generation of credit union leaders. The group is made up of individuals under 40 years from credit unions, leagues and industry partners. The group began in early 2010. Applications are due Feb. 1.
Credit Unions for Kids is the credit union movement's fundraising vehicle benefitting Children's Miracle Network Hospitals.
"Over the past two and a half years, the Young Leaders for Kids Board has been instrumental in the success of our CU4Kids program nationwide," said Joe Dearborn, Children's Miracle Network Hospitals senior director of corporate partnerships. "The team's efforts helped us engage thousands of credit unions and reach new fundraising heights in 2012. They are working on some new, exciting fundraising ideas, and I look forward to seeing their impact in 2013."
For more information, use the link.
Filene pilot to improve marketing efficiency, effectiveness
MADISON, Wis. (1/16/13)--The Filene Research Institute announced a new pilot project--Leeflet, which will improve the cost efficiency and marketing effectiveness of credit unions in an innovative way--delivering targeted brochures electronically.
A regular credit union may spend $50,000 or more each year on paper brochures, with no way of knowing who reads them or who follows their calls to action, Filene said. Terms, conditions, rates and available products are constantly changing. Traditional brochures are outdated almost as quickly as they're printed. As credit unions change, they must update brochures--dooming the current inventory of paper brochures to the recycle bin, Filene said.
One of Filene's i3 innovation teams worked closely with electronic marketing experts at DigitalMailer to create Leeflet, an electronic brochure program already in use at Smart Financial CU, Houston; Financial Center FCU, Indianapolis; and Fort Knox FCU, Radcliff, Ky. Initial performance is promising: The open rate for all Leeflet brochures is more than 70% with a click-through rate higher than 25%.
Leeflet--the name was chosen to communicate that it is an electronic brochure--allows credit unions to enhance sales and marketing efforts by cutting down on collateral costs, and tracking campaign effectiveness. The webinars will describe expectations for pilot participants and outline the timeline of the research.
Credit unions interested in learning how to reduce brochure expenses by as much as 75% can learn more by signing up for one of two free webinars titled Leeflet: Improving Cost Efficiency and Effectiveness of Marketing Collateral, on Jan.29 at 12 p.m. CT, and Feb.12 at 1 p.m. CT. To register, use the link.
For more information, contact Tansley Stearns at 608-661-3753 or by e-mail at email@example.com.
Enterprise Car Sales generates $380M in CU auto loans
St. LOUIS (1/16/13)--Enterprise Car Sales said it generated more than $380 million in loan volume for credit unions through used-vehicle sales to more than 23,000 credit union members nationwide last year. The company's specialty is working with credit unions of all sizes to increase auto loan volume.
The loan volume generated is 15% higher than 2011 (autoremarketing.com Jan. 15).
Respondents--in an independent research study commissioned by Enterprise Car Sales to determine the relative consumer appeal of offering buying incentives--showed greater interest in vehicle-related offers such as warranty protection than in promotional items such as high-definition TV sets.
Those findings confirm the value to consumers of Enterprise Car Sales' "Perfect Used Car Package," which features a 12-month/12,000-mile limited powertrain warranty for every used model purchased, Mark McAndrews, assistant vice president of Enterprise Car Sales, told the publication.
Credit unions' partnerships with Enterprise Car Sales have been fruitful because the two have much in common, including a high level of member service, along with a commitment to local communities, McAndrews said.
Enterprise's relationships with credit unions have continued to grow stronger and more productive for more than 30 years, he continued. That success stems from credit unions considering Enterprise a part of their overall auto strategy, Andrews told the publication.
Enterprise--for its committed partners--sends members back to their credit unions for financing, 100% of the time, McAndrews concluded.
Virginia league to relocate some jobs to Richmond
LYNCHBURG, Va. (1/16/13)--The Virginia Credit Union League is relocating members of its staff--including President Rick Pillow--to new office space in the state capitol of Richmond, Va., to support the league's governmental affairs and regulatory work.
"This is a game-changing decision for the Virginia League and will enhance our advocacy work on behalf of member credit unions," said League President Rick Pillow. "We are a respected and effective advocate for Virginia's credit unions, but a permanent presence in the state capital will raise our visibility and keep us connected to lawmakers and regulators."
Officially headquartered in Lynchburg, about 115 miles from Richmond, the league has discussed moving some or all of its operations to Richmond a number of times during the past two decades.
The organization has rented office space in Richmond to facilitate its lobbying and regulatory work, but this will be the first time it has had a permanent presence in Richmond or has permanently assigned more than one or two staff members to the Richmond area.
By January 2014, five of the league's 24 staff members--Pillow and three of the league's five management team members--will be permanently assigned to the Richmond office.
No positions will be cut, and league staff now working at the Lynchburg office will continue to be headquartered there.
Plans for the Richmond office include a reception hall, with sufficient space to host legislative events and credit union meetings.
MnCUN adds to shared branching network
ST. PAUL, Minn. (1/16/13)--The Minnesota Credit Union Network expanded the number of Shared Branching locations in its state to 36 with the addition of Minnesota Valley FCU.
With MnCUN's most recent addition the nationwide network now offers nearly 5,000 service centers nationwide.
Consumers have said that banking locations near their home or work is a major factor in determining their choice for a primary financial institution.
"The expansion of the Shared Branching network is important to credit unions' growth, and it's a vital piece of a successful member-retention strategy," said MnCUN Vice President – Network Service Corporation John Ferstl. "Shared Branching helps credit unions attract and keep members by offering them branch options around the state, and nationwide. This network of service centers increases the probability of finding a credit union nearby – no matter whether the member is close to home or on the road."
Qualstar CU pays out $2.5 million dividend
REDMOND, Wash. (1/16/13)--Qualstar CU, Redmond, Wash., is thanking members for their loyalty with a $2.5 million bonus dividend.
Individual bonus dividends range from five dollars to several thousand, with the average member receiving a bonus dividend of $72.
"We have extremely loyal members, and last year their loyalty helped us have our most profitable year ever," said Mark Nelson, CEO of the $327 million credit union. "We felt that with the exceptional earnings we saw as a result of that loyalty, the best way to thank them is to give back to those members who helped make that happen."
Members earned dividends based on their deposit and loan balances, as well as other services that help reduce expenses to the credit union including Home Banking and eStatements.
"This isn't about who has the most money on deposit, it's about thanking all of our members for their contribution to our success." said Tracey Elfstrom, vice president of member relations. "Whether they have a large Money Market balance, a mortgage loan, or a Visa Credit Card, it all matters, it's all important--and they all deserve to benefit as a result."
CU System briefs
- ONTARIO, Calif. (1/16/13)--CU Direct Corporation, a provider of lending solutions to the credit union industry, will return a 3% cash dividend to its 102 shareholders for the 2012 calendar year. It is the eighth consecutive year that the credit union service organization has paid dividends to its shareholders. CU Direct signed new agreements with 109 credit unions in 2012. At year's end 1,050 credit unions, serving 34 million members, were using the credit union service organization's lending solutions …
MADISON, Wis. (1/16/13)
- U.S. retail sales increased more than expected in December, even though consumers finished their holiday shopping--indicating people looked beyond lawmakers' budget battles and suggesting consumer spending gained momentum at year-end (Bloomberg.com, The New York Times and Moody's Economy.com Jan. 15). Sales rose 0.5% following a 0.4% gain in November, the Commerce Department said Tuesday. Economists had forecast a 0.2% retail-sales rise in December, according to a Bloomberg survey and a separate Reuters survey. Growth in incomes, an improving labor market, and discounting by chains boosted consumer spending, which constitutes roughly 70% of the U.S. economy, Bloomberg said. However, at the same time, higher payroll taxes, which kicked in this month, will reduce take-home pay and make it harder for households to increase their purchases, Bloomberg added …
- For the third consecutive month, U.S. wholesale (producer) prices slid 0.2% in December, indicating that inflation remained tame as energy costs continue to decrease (The Wall Street Journal, The New York Times and Moody's Economy.com Jan. 15). The producer-price index--which is a gauge of how much manufacturers and wholesalers paid for finished goods--fell to a seasonally adjusted 0.2% in December from November, the Labor Department said Tuesday. A 0.9% decrease in food prices and a 0.3% decline in energy costs drove the index's drop, the Journal said …
News of the Competition
MADISON, Wis. (1/16/13)
- The board of Bank of America (BofA) has agreed to pay $62.5 million to settle a lawsuit, arising from its purchase in 2009 of Merrill Lynch (American Banker Jan. 14). U.S. District Judge Kevin Castel in Manhattan approved the agreement Friday. It resolves claims made by at least four pension funds, alleging the bank's officers and directors did not disclose information about a drop-off in Merrill's financial health before BofA asked shareholders to approve the deal. As a result of the settlement, an insurance policy that shields the bank from damages from derivative lawsuits will reimburse BofA, the Banker said …
- Federal regulators publicly announced enforcement orders regarding JPMorgan Chase's multibillion dollar loss connected to trading activity in London (American Banker Jan. 14). Currently, the orders involve no monetary penalties. The Office of the Comptroller of the Currency and the Federal Reserve Board ordered JPMorgan Chase to rectify its internal controls, and exert more oversight on, and invest more resources in, its trading activities, the Banker said …
Ten steps to fiscal fitness in 2013
WASHINGTON (1/15/13)--As the new year gains momentum, many consumers enact resolutions involving personal finances--potentially complicated by anticipated tax-law and other regulatory changes. Whatever your goals, this uncertainty behooves you to be as fiscally savvy as possible (U.S. News & World Report Dec. 20).
Here are 10 tips to help you keep your financial resolutions:
- Shop for bargains all year and don't be afraid to negotiate for discounts. Many retailers offered price-matching last year, and that may continue. Think before you buy. Do you need it? Could you borrow it?
- Make money decisions with your partner. Agree on spending priorities and you can invest in what you both value.
- Pay down debt. Sizable debt can seem insurmountable; if you pay a small amount of money regularly to the highest-rate bills, you'll slowly see your debt shrink.
- Ensure you're saving enough for retirement. Use one of the many online calculators to estimate how much you'll need and determine if you should bump up your 401(k) or other retirement account contributions. Examine how your money is invested and adjust the mix if needed.
- Find a better credit card. If yours has high rates or fees, shop for a better deal: Credit unions typically offer better terms. If you have a card with rewards points, make sure you use them.
- Find a better financial institution. If yours provides shoddy service at high prices, switch. Nonprofit, member-owned credit unions exist to improve your financial life, so consider joining one if you're not already a member.
- Earn more. Ask for a raise or, if your income has plateaued at your job, think about taking on a second job or about becoming an entrepreneur and starting a new business. Talk to your financial adviser first so you have a sound business model.
- Stay home. Cooking meals, playing games, watching movies--Hulu Plus, Apple TV and the like are more affordable than theaters--are inexpensive fun. Making home improvements that increase efficiency can save money while making your abode more comfortable. Be sure your homeowners insurance covers all eventualities as well.
- Talk about money with your kids. You play a significant role in how your children handle money and make financial decisions, so share your wisdom with them. Involve them in family decision-making and talk about saving, spending, giving and borrowing. Show them online money sites like the Credit Union National Association's Googolplex, which include fun articles, games and activities to help teach kids about money management.
- Use less gas. Of course you'll frequent the lowest priced gas station around, but also lighten your vehicle by removing heavy items from the trunk. Inflating your tires to the proper levels and replacing clogged air filters will improve mileage per gallon, and carpooling lets you share costs. Take public transportation, bike, or walk when you can.
For more information, read "Credit counselors say resolutions not right for everyone" in the Home & Family Finance Resource Center.
H&FF Radio reviews estate planning, loans to adult children
WASHINGTON (1/14/13)--Sunday's H&FF Radio suggested a fresh start for the new year, and reviewed asset protection management and whether you should lend money to your kids.
The show, which you also can hear later via the Internet, featured Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
- "Happy, Healthy New Year." Marianne McGinnis, editor, Prevention Magazine, San Diego, exhorted listeners to avoid making resolutions they can't keep. Instead, she suggested viewing the new year as a fresh start and striving for a lifestyle of healthy eating habits and better financial choices.
- "Active Asset Protection Planning." Jeffrey Matsen, author of "The Ladder of Success, An Asset Protection Planning Primer" and an attorney at Bohn, Matsen, Kegel & Aguilera LLP, Costa Mesa, Calif., discussed the importance of estate planning and asset protection management.
- "Before You Give Your Kid a Loan." Frank Jaffee, a certified financial planner at Access Wealth Planning, Roseland, N.J., revealed the three questions baby boomers should ask their young-adult children before granting them loans.
Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.
CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.
For related information, read "Four Key Steps to 'No Regrets' Retirement" and "Credit Counselors Say Resolutions Not Right for Everyone" in the Home & Family Finance Resource Center.
CUNA Lending Compliance School dates set
MADISON, Wis. (1/16/13)--Gaining a better understanding of credit union lending compliance is the appeal of the CUNA Lending Compliance School June 2-6 in Fort Lauderdale, Fla.
The school offers credit union professionals a comprehensive curriculum focused on in-depth compliance topics in all disciplines of lending. Attendees at this year's school will:
- Participate in a compliance management system interactive project, walking through the regulatory change process from proposed rule to implementation;
- Gain in-depth knowledge from the 12 new breakout sessions with topics such as consumer, residential real estate and member business lending;
- Discover high-demand topics in smaller segments and dive into the details of loan modifications, mortgage rules, new consumer rules, fair lending, bankruptcy basics, pre-screening rules and more;
- Learn about the Consumer Financial Protection Bureau through a general session that is followed by breakouts on individual rules; and
- Network during more than five hours of team projects and lending challenge breakout sessions.