News Now Archive

Published on January 17, 2013.

CFPB mortgage servicers rule carries a 5,000-loan exemption

WASHINGTON (1/17/13)--A final rule to require mortgage servicers to simplify billing statements, provide additional notice of rate changes to borrowers and help ensure that consumers know all of their options to prevent foreclosures have been released by the Consumer Financial Protection Bureau. The rule raises a key exemption threshold on monthly mortgage statements, a change that had been urged by the Credit Union National Association in its discussion with the CFPB.
The CFPB rule contains an exemption from some of its provisions for credit unions and other small financial institutions that service 5,000 or fewer loans, which they or an affiliate originate, up from a proposed 1,000-loan threshold.
"We actively advocated for the CFPB to increase the periodic statement requirement threshold from their proposed 1000 loans serviced to a higher number," noted CUNA President/CEO Bill Cheney.
"Our priority has been to ensure that as few credit unions as possible would be subject to these requirements. The 5,000 threshold is a marked improvement over the proposal, and while the devil is in the details, it appears small servicers such as credit unions will also be exempt from the loss mitigation application handling procedures, which is also a significant win for credit unions," he added.
Cheney said that CFPB Director Richard Cordray told him in a phone call prior to the rule's release that key changes would be incorporated in response to input the CFPB had received from credit unions and CUNA.
CUNA noted that more exemptions for credit unions may be contained in the final rule.
CUNA is reviewing the information the agency has released and additional positive provisions may be contained in the final rule.

The final rule, required by the Dodd-Frank Act, is set to go into effect in January 2014 and will require servicers to:

Servicers will be prevented from moving forward with foreclosure proceedings if a borrower has submitted an application for a loan modification or foreclosure prevention measure. Servicers will also need to consider all available foreclosure alternatives that are available to borrowers, and may not steer borrowers toward a specific alternative. The regulations will also make it more difficult for servicers to move for foreclosure judgment or conduct a foreclosure sale, the CFPB said.
New data storage and form processing standards are also contained in the regulations.
The agency and other regulators will release plain language implementation guides and other materials to help ensure the regulations are more easily implemented. Model and sample forms have also been released for servicers, and the CFPB said it will reach out to educate consumers on the new rules.
CUNA is developing regulatory summaries and charts to outline how the CFPB mortgage regulations will impact key credit union concerns and this information will be on CUNA's website as soon as possible in coming days.
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House Speaker John Boehner to address CUNA's 2013 GAC

WASHINGTON (1/17/13)--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.

CUNA's 2013 GAC takes place Feb. 24-28 at the Washington Convention Center in Washington, D.C.  Other confirmed speakers include newly named House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Majority Whip Kevin McCarthy (R-Calif.), and House Financial Services Committee senior members Spencer Bachus (R-Ala.) and Ed Royce (R-Calif.).

More congressional and regulatory speakers will be announced in coming weeks.

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Small CU consulting program receives record interest

ALEXANDRIA, Va. (1/17/13)--A record 319 credit unions have applied for planning assistance and other help through the National Credit Union Administration's Office of Small Credit Union Initiatives (OSCUI) Consulting Program, the agency has reported.

This heightened interest has led to a record number of consulting program participants in the first round of 2013: 240 credit unions will take part. Credit unions that have been accepted into the consulting program were notified in mid-January, OSCUI said. This round of the consulting program will run from January until June. A second 2013 round of the program will begin in July.

Through the consulting program, OSCUI offers budgeting, marketing, policy development and strategic planning assistance. The experienced economic development specialists that offer this assistance also help credit unions tackle other examination issues and issues related to internal controls and regulatory compliance. Assistance with net worth restoration plans or revised business plans, and consulting services to groups that wish to organize a credit union may also be provided, according to the NCUA.

Credit unions with less than $10 million in total assets, charters that have been approved within the past 10 years, or low-income designations may apply for the consulting program. The program is free of charge.

OSCUI Director William Myers said the program has much to offer eligible credit unions.

More than 200 credit unions took part in the most recent round.

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CUNA spotlights CU concerns at today's CFPB mortgage field hearing

ATLANTA, Ga. (1/17/13)--Regulatory burden and how pending mortgage regulations could impact credit unions will be two items on the agenda when Pam Davis of Delta Community CU, Atlanta, Ga., voices credit union concerns at today's Consumer Financial Protection Bureau (CFPB) field hearing.

Davis, who serves as vice president of real estate services at Delta Community CU, will speak on a panel of three financial services industry speakers. She will speak on behalf of the Credit Union National Association and the Georgia Credit Union Affiliates. CUNA was invited by the CFPB to participate on one of the field hearing panel discussions.

The field hearing is scheduled to begin at 11 a.m. ET at the Rialto Center for the Arts at Georgia State University. League leaders and other credit union representatives will also attend the event.

The hearing will also feature remarks from CFPB Director Richard Cordray, consumer groups and members of the public. League and credit union officials are scheduled to meet directly with Cordray this week.

In her remarks, Davis will urge the agency to recognize the differences between credit unions and for-profit institutions as it develops regulations. She will also encourage the CFPB to exempt credit union activities as broadly as possible in light of those key distinctions, and credit union efforts to offer consumers a good deal.

The CFPB ahead of the hearing released a summary of its final mortgage servicing rule, which will be released in full today.

CUNA anticipates that final rules addressing mortgage loan originator compensation and high-risk-mortgage appraisals will also be released by the CFPB today. The National Credit Union Administration and Federal Deposit Insurance Corp. have already approved the high-risk-mortgage appraisal rule. (See Jan. 16 News Now story: NCUA approves high-risk mortgage appraisal rules)

These regulations are among a number of final rules that the CFPB must release by Jan. 21. Last week, the agency unveiled final rules regarding ability to repay requirements, escrow accounts, and "high-cost" mortgages. (See Jan. 11 News Now story: CFPB QM, ability-to-repay rules are out, CUNA provides summary)

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Treasury's BSA advisory group seeking members

VIENNA, Va. (1/17/13)--The Bank Secrecy Act Advisory Group (BSAAG), which ultimately makes BSA policy recommendations to the U.S. Treasury Secretary, is seeking nominations for new members.

The Credit Union National Association is a current member whose term continues through February 2015. CUNA fills the Credit Union Industry Trade Group position on the panel.

The advisory panel operates under the auspices of Treasury's Financial Crimes Enforcement Network (FinCEN) and is chaired by the FinCEN director.

FinCEN is inviting the public to nominate financial institutions and trade groups for membership on BSAAG for a three-year terms. Nominations for individuals will not be considered.

Use the resource link for application rules.

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Inside Washington

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Study: Young credit card users racking up debt

COLUMBUS, Ohio (1/17/13)--Younger Americans not only take on more credit card debt than their elders, but they are also pay it off at a slower rate, reported a recent study from Ohio State University.

Younger generations may continue to add credit card debt into their 70s, and die still owing money on their cards, said the study. This is an opportunity for credit unions to educate Gen X and Y about money management and using credit cards wisely, according to the Credit Union National Association.

"When individuals rack up high amounts of debt at a young age, they get themselves into a vicious cycle that often is very hard to get out of," Michelle Dosher, managing editor in CUNA's business and consumer publishing area, told News Now.

"Credit unions can help young adult members by educating them about the consequences of poor money management and by giving them advice about the smart use of credit," Dosher added. "Teaching members strong money management skills at a young age will help them as they become mature adults. By providing this initial education, credit unions are instilling in members that the credit union is there to provide guidance throughout different stages of their lives."

Lucia Dunn, co-author of the study and professor of economics at OSU, noted, "If what we found continues to hold true, we may have more elderly people with substantial financial problems in the future.Our projections are that the typical credit card holder among younger Americans who keeps a balance will die still in debt to credit card companies."

Persons born between 1980 and 1984 have credit card debt substantially higher than do the previous two generations, the study found. On average, they hold $5,689 more debt than their parents born during 1950-1954 at the same stage of life and $8,156 more than their grandparents born during 1920-1924. Children's payoff rate is 24 percentage points lower than their parents' and about 77 percentage points lower than their grandparents' rate.

The study also uncovered good news: Increasing the minimum monthly payment spurs borrowers to not only meet the minimum, but to pay off substantially more, possibly eliminating their debt years earlier.

Researchers combined data from 1997 to 2009 for consumers ages 18 to 85 years for a final sample size of 32,542.

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Agility to CUs: Protect business, have employees get flu shots

MADISON, Wis. (1/17/13)--Credit unions should strongly urge their employees to be vaccinated against influenza and consider offering flu vaccination clinics at their offices, experts advised during a free webinar hosted by Agility Recovery Wednesday.
Agility Recovery is a CUNA Strategic Services Provider that specializes in business continuity for credit unions in disaster situations.
The influenza outbreak has reached epidemic proportions in the U.S., the Centers for Disease Control and Prevention, reported. The number of states reporting widespread activity rose to 47 from one week ago.
That activity is likely to remain high for the next several weeks, Dr. Michael Jhung, lead medical officer in the CDC's Influenza Division, said during the webinar.
"Flu season started earlier than normal this year, and outbreak levels are likely to remain elevated," Jhung told webinar participants.
The good news is that the current vaccine is about 62% effective, Jhung said. This year's flu vaccine protects against an influenza A H3N2 virus, an influenza B virus and the H1N1 virus.
"The vaccine doesn't guarantee you won't contract influenza, but it does greatly reduce the risk and that is good public health policy," Jhung said.
To prevent a widespread outbreak of flu at the credit union, Mark Norton, Agility Recovery, senior continuity planner, offered these tips:

"If anyone is feeling ill, have them stay at home," Norton said. "We are trying to prevent having those ill people in the office because that is where the virus comes from."
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Securities group files brief in NCUA's big banks suit

DENVER (1/17/13)--Another securities industry group plans to file an amicus brief supporting Wall Street banks in lawsuits brought by the National Credit Union Administration's against them over their sale of residential mortgage backed securities to corporate credit unions.
The Securities Industry and Financial Markets Association, which represents securities firms, banks and asset managers, filed a motion Tuesday in the U.S. Court of Appeals for the Tenth Circuit in Denver seeking more time to prepare and file its brief. SIFMA seeks a four-week deadline extension--to Feb. 15.
So far those seeking appeal include RBS Securities Inc., Wachovia Capital Markets LLC and Wachovia Mortgage Loan and Trust LL. Also involved are Nomura Home Equity Loan Inc., Novastar Mortgage Funding Corp., Financial Asset Securities Corp., and RBS Acceptance Inc.
They oppose a July 25 decision from the U.S. District Court for the District of Kansas. They also allege that NCUA did not file its lawsuits within the time limits allowed by law.
NCUA's lawsuits against the banks alleged they misrepresented and omitted material facts in the documents offered to U.S. Central FCU and Western Corporate FCU, and had systemic disregard of underwriting guidelines. The misrepresentations caused the corporates to believe the investment risk was minimal, when it was substantial, said NCUA. The corporates collapsed in 2009 and NCUA is suing as the liquidating agent.

The lower court ruled NCUA's lawsuit could proceed and that certified certain controlling legal questions in the suit.  They include whether the Federal Credit Union Act's "extender" statute--which allows additional time in certain circumstances to file a claim in court--applied to the three-year statutes of repose for filing a case in court, including the three-year statute of repose in the federal Securities Act of 1933; and whether the extender statute applies to federal statutory claims.

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Special CU license plates popular with Delaware members

NEW CASTLE, Del. (1/17/13)--Credit union members in Delaware can proudly display their membership on the backs of their vehicles, according to the Delaware Credit Union League. The league worked with the state's Division of Motor Vehicles to develop license plates available only for vehicles owned by credit union members.

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The CU Tag project was the brainstorm of Robert Walls, former league president. Initiated in 2000, the program required 200 drivers to sign up for the tags. That was accomplished Nov. 1, 2001.
"It was a long process, but we finally have the requisite number of tags to go forward with the printing of these motor vehicle tags that will define the driver as a credit union member," Walls said at the time.
In the past 11 years, the DMV has processed 366 credit union license plate number requests. Proceeds from the CU Tag project go to the league's scholarship fund. The fund provides scholarships for credit union staff training, especially for small credit unions, Alice Smith, the league's communications/governmental affairs director, told News Now. So far, the plates have garnered $4,150 for the fund.
Unlike "vanity" plates offered by the DMV, the credit union license plate does not cost extra when the vehicle owner re-registers the plate every year. To get the credit union plate, the member pays $20 as a one-time fee. The specialty tag is valid as long as the tag holder continues to be a member of a credit union.
Credit union plate numbers can go up to CU 9999, said the league. The numbers are valid registration numbers for motor vehicles and the plate can be used in addition to a member's current license plate. Either plate, or both, can be displayed on the vehicle.
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Minnesota's CUs boost lending in 3Q

MINNEAPOLIS (1/17/13)--Members of Minnesota's credit unions borrowed more during the third quarter, a reflection of the state economy's gradual improvement, according  to the  Minnesota Credit Union Network's quarterly report.   
Minnesota credit unions' loan balances increased 1.5% in the third quarter from the prior quarter, and were 4.5% higher than a year earlier (Dolan Media Newswires Jan. 16).
Also, the MnCUN report indicated:

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Social engineering scam fooling service reps

MOUNTAIN VIEW, Calif. (1/17/13)--Member service representatives trying to be helpful to credit union members may fall for a scam that requires taking over a member's online account and tricking the rep via a chat session into helping out with the scam.
Mountain View, Calif.-based Guardian Analytics, an online security vendor that specializes in detecting anomalies, says the scam targets both small and large financial institutions and has migrated to call centers, using older tactics in new ways  ( FraudBlogger Jan. 15).
The scams involve four steps. Cybercriminals:

The member service rep, believing the chat session is with the accountholder because the session takes place through an already online authenticated process, helps complete the wire transfer.
Guardian also found that many compromised accountholders are also victims of work-at-home scams that involve one-time deposits to online accounts. Later the cybercrooks remove funds from the accounts. It is not clear whether the credentials are provided voluntarily or stolen.
The company advises financial institutions to:
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Jersey Shore FCU issues community savings challenge

NORTHFIELD, N.J. (1/17/13)--Jersey Shore FCU is challenging its membership to save  $500,000 in loan interest and fees to help the credit union celebrate its 50th anniversary.
If members reach the $500,000 milestone, the Northfield, N.J., credit union will donate $5,000 to four local charities (The Daily Journal Jan. 16).
Members can take a free five-minute financial checkup to see if they qualify for a lower interest-rate personal or home loan. If they do, they can select a partner charity to receive a donation.
Charities included in the challenge are Atlantic City Rescue Mission, Humane Society of Ocean City, Family Promise of Cape May County and Shore Medical Center Foundation.
Donations will be awarded in three increments: $2,500, $1,000 and $750, with two charities receiving $750.

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Beige Book: Modest or moderate growth for all U.S. districts

WASHINGTON (1/17/13)--Economic activity has expanded in all 12 U.S. financial districts at either a modest or moderate growth pace, according to the Federal Reserve's Beige Book released Wednesday.
All 12 districts reported some growth in consumer spending, with inflation mostly unchanged.
Trends in wages, prices, and employment conditions stayed relatively unchanged in all districts. Input price pressures were reported to be steady overall, with mixed reports for specific commodity prices in several districts. Employment conditions also were little changed since the last report.
However, hiring plans were more cautious for firms doing business in Europe or in the defense sector. Wage pressures were stable in all 12 districts, though several districts cited greater pressures for firms that reported difficulties finding qualified workers with specific skills.
Manufacturing activity was mixed, with six districts growing since the last Beige Book, three contracting, and two reporting little or no change.
Existing residential real estate activity expanded in all reporting districts. Growth rates were described as moderate or strong in nine districts. The Boston District attributed its strong sales growth to low interest rates, affordable prices and rising rents. All districts reporting on price levels saw increases, with New York and Chicago reporting only very minor increases. Five districts reported housing inventories are falling.
New residential construction--including repairs--expanded in all but one district reporting. The Kansas City District reported that increased lumber and drywall costs limited construction, causing a slight decline this period. Hurricane Sandy disrupted construction activity initially in New York, but that has since led to increased work for subcontractors on repairs and reconstruction.
Labor market conditions remained mostly unchanged in all districts. The Boston, Richmond, Atlanta, Chicago, Kansas City and San Francisco districts reported delayed hiring, often in defense manufacturing, due to fiscal cliff uncertainties.
Companies in the Chicago District with trade or investment exposures to Europe reduced their hiring plans. Manufacturers there choose to cut hours instead of reducing work forces in expectation of production rebounds in 2013. Atlanta and Kansas City cited health-care policy changes and costs as another cause for minimal hiring. The New York, Atlanta, Minneapolis and Dallas districts saw the labor market firming modestly. Several districts reported difficulties finding qualified workers in some fields.

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Market News

MADISON, Wis. (1/17/13)

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News of the Competition

MADISON, Wis. (1/17/13)

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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:

  1. 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?
  1. Make money decisions with your partner. Agree on spending priorities and you can invest in what you both value.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
These are just a few money-wise tips for this year; if you examine your goals and daily activities, you'll likely find many more. Save your extra cash in your credit union account for unforeseen expenses and you're ready to handle any financial uncertainty 2013 brings.
For more information, read "Credit counselors say resolutions not right for everyone" in the Home & Family Finance Resource Center.
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CUNA's Pressing Economic Issues Series offered on Apple

MADISON, Wis. (1/17/13)--The CUNA Pressing Economic Issues Series is now accessible on Apple products, including Mac computers and iPads.
The series features 30-minute economic updates provided by Bill Hampel, CUNA senior vice president of research and policy analysis and chief economist; Mike Schenk, CUNA vice president of economics and statistics; and Steve Rick, CUNA senior economist.
"These three economists provide invaluable insight to CUNA and credit unions, and improving access is a win," said Kevin Smith, CUNA director of volunteer education.
For iPad users, sessions can be accessed by downloading the free mobile player application, Articulate. Mac users can now follow the subscription link on the CUNA Pressing Economic Issues Series page.
Now offered on the 15th of each month, the CUNA Pressing Economic Issues Series helps subscribers stay informed about pressing issues that specifically impact credit unions and discover the trends to watch as they prepare themselves for challenges ahead.

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CO-OP Financial Services reaches 2.5 billion transactions in 2012

RANCHO CUCAMONGA, Calif. (1/17/13)--CO-OP Financial Services set new records in annual, monthly and daily transaction volume during 2012--including 2.5 billion transactions for the year.
"It was another good year for CO-OP Card Payment services, reflecting the slowly improving economy," said Stan Hollen, president/CEO of the processor of electronic payments by credit union members. "With the resolution of fiscal issues and continued economic improvement, we hope to see an even stronger year in 2013."
The 2.5 billion transaction figure for 2012 is a 13.6% increase over the 2.2 billion processed in 2011. It includes cardholder debit, credit, ATM and shared-branch payments. The company exceeded the two billion transaction mark for the first time in 2010, and reached the one billion milestone originally in 2004.
In addition to the new annual mark, CO-OP reached a new single month transaction record in December with 230 million transactions. On Dec. 22, the company established a new single day transaction record with nine million payments processed.
CO-OP has 3,500 credit unions as clients, which includes 30 million credit union cardholders.

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