MBL Bill Introduced in House

U.S. CapitolOn April 7th Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) introduced Member Business Lending legislation in the House (H.R. 1418) titled the Small Business Lending Enhancement Act. Joining these two bill sponsors as original co-sponsors were Reps. Russ Carnahan (D-MO.), Gary Peters (D-MI.), and Hank Johnson (D) from Georgia.

The Small Business Lending Enhancement Act would raise the current credit union member business lending cap from 12.25% to 27.5%, and mirrors the Senate MBL bill in requirements for the higher cap (well capitalized, history of MBL experience, be operating near the lower cap for at least one year, and receive approval from NCUA). In the upcoming days it is anticipated that more Georgia Congressmen will sign on to the bill as the co-sponsors increase and support for this legislation grows. 
Read more
 

Washington, D.C. News

MBL Bill Introduced in House
Some Regulatory Relief in Sight: Form 1099 Changes Awaiting President’s Signature
CUNA Seeks Treasury Backing for Interchange Delay and MBL Increase
Interchange, MBLs See Senate Spotlight at End of March
Democratic Trio Seek Support for House Interchange Delay Legislation
Dodd-Frank Author for Interchange Delay

Industry News

‘No Free Lunch’ on Interchange
NCUA Sues to Recover Defunct CU's Land Development Losses
Matz Named Chair of FFIEC

State News

State Legislature: What’s Left?
DOR to Launch Debit Card Pilot Program

Public Influence

Georgia Senators Hearing Mixed Messages in Interchange
WalletPop, L.A. Times Give CUs Thumbs Up on Low Fees
National Credit Union Youth Week: What’s Your CU’s Plan?
Ten Tips for a Top-Notch Entry
Statewide News Coverage
CUs in the News
Consider This
Paying Attention

News of Interest

Interchange Suit Open . . . For Now
Unemployment Numbers Drop Nationwide

News of the Competition

Shareholders Sue BOA Over Foreclosure Practices

 
March 8, 2011
 
Project ZIP Code
 
Contact Your Legislator
 
Maximize the Power of the Media
 
State Legislative Update Page
 
 
Georgia Credit Union Affiliates
AMERICA'S CREDT UNIONS
Extend the Reach of Creating Influence
Stay on top of what's happening with credit union advocacy by reading Creating Influence, the Georgia Credit Union Affiliates' advocacy e-newsletter! If you’d like to be added to the distribution list, email Advocacy@gcua.org or call an Advocacy Team member – Cindy Connelly, Mike Culbertson, Anita Paul or Brandee Bickle – at 800-768-4282.
 
Washington, D.C. News
 
Johnson
U.S. Rep.
Hank Johnson
MBL Bill Introduced in House

On April 7th Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) introduced Member Business Lending legislation in the House (H.R. 1418) titled the Small Business Lending Enhancement Act. Joining these two bill sponsors as original co-sponsors were Reps. Russ Carnahan (D-MO.), Gary Peters (D-MI.), and Hank Johnson (D) from Georgia.

The Small Business Lending Enhancement Act would raise the current credit union member business lending cap from 12.25% to 27.5%, and mirrors the Senate MBL bill in requirements for the higher cap (well capitalized, history of MBL experience, be operating near the lower cap for at least one year, and receive approval from NCUA). In the upcoming days it is anticipated that more Georgia Congressmen will sign on to the bill as the co-sponsors increase and support for this legislation grows. 
Back to top
 
 

Some Regulatory Relief in Sight: Form 1099 Changes Awaiting President’s Signature

White HouseIn addition to the above MBL bill that was introduced in the House this week, credit union interests were also moved forward in the form of regulatory relief. The Senate on April 5th approved by a vote of 87 to 12 a bill that would repeal a burdensome provision in the healthcare law requiring businesses to file Internal Revenue Service Form 1099-MISC on every annual purchase of goods from a vendor above $600.00. As a "pay-go" effort to offset the cost to taxpayers of the new healthcare reform law, Congress last year extended the 1099-MISC reporting provisions to cover payments for goods valued over $600. Rep. Dan Lungren's (R-Calif.) H.R. 4 would repeal this extension, and would also repeal an additional Form 1099 rental real estate related reporting requirement.

Credit unions and other businesses have long been required to report on Form 1099-MISC certain payments of $600 or more that will be considered income by the IRS. Lungren's legislation, which passed the House with 324 affirmative votes last month, had nine Georgia Representatives as co-sponsors: Reps. Sanford Bishop, Paul Broun, Phil Gingrey, Tom Graves, Jack Kingston, Tom Price, Austin Scott, Lynn Westmoreland, and Rob Woodall. CUNA earlier this year backed the bill, noting that requiring 1099-MISC forms on goods was extremely burdensome and had questionable value in actually increasing federal revenue. President Obama must still sign the bill before it can become law.

Back to top
 
 

CUNA Seeks Treasury Backing for Interchange Delay and MBL Increase

In its continuing efforts to pursue relief for credit unions, CUNA encouraged the U.S. Treasury Department on March 28th to support a delay in the debit fee interchange statute's implementation. In the meeting with Treasury Deputy Assistant Secretary for Financial Institutions Lance Auer and others, CUNA also urged the department to continue its support of legislation that would increase the cap on credit union member business lending (MBL). The Obama administration has publicly endorsed the MBL plan that CUNA says would boost both credit availability for small businesses and the jobs market at no cost to taxpayers. Auer indicated that the administration's previous support for this legislation had not changed because the legislation itself has not changed since last year (Sen. Mark Udall has re-introduced legislation that would increase the MBL cap to 27.5% of a credit union's assets). CUNA also used the time to discuss with Treasury supplemental capital and raised credit union concerns on regulatory examination issues.

Back to top
 
 

SpotlightInterchange, MBLs See Senate Spotlight at End of March

Two of the credit union world's hot-button issues -- delaying implementation of debit card interchange fee limits and lifting the member business lending (MBL) cap -- were spotlighted March 31st in Senate floor remarks by key lawmakers. With Senate colleagues around him, Sen. Jon Tester (D-Mont.) urged support for legislation that would delay the implementation of the Federal Reserve's planned interchange fee rate cap, noting that Congress should not let these new regulations come into effect before knowing both the intended and unintended consequences of this action. The interchange provisions, which are currently set to become effective on July 21st, could lower the amount of transaction fees charged to seven cents per card swipe. Tester and Senate colleague Bob Corker (R-Tenn.) have introduced legislation that would delay by 24 months the implementation of these new standards, and that legislation could be offered as an amendment to a still developing small business package. In related news:

Fed Chairman Ben Bernanke recently announced that his agency would not be able to meet a statutory April 21 deadline for the issuance of debit interchange fee standards. The new standards are currently set to come into law on July 21.

And on MBL:

Sen. Mark Udall (D-Colo.) highlighted his MBL cap legislation on March 31st, and called on his fellow Senators to help him "get government out of the way" and allow credit unions to increase their lending to small businesses. He also criticized the current "arbitrary cap" limiting MBL activity to 12.25% of a credit union's total assets. Udall's S. 509, The Small Business Lending Enhancement Act of 2011, would increase the MBL cap to 27.5% of a credit union's assets.

Back to top
 
 

Democratic Trio Seek Support for House Interchange Delay Legislation

Debit cardsRep. Debbie Wasserman Schultz (D-Fla.) and a pair of other legislators have urged their House colleagues to add their names to the list of representatives calling for a delay in interchange fee cap legislation. Reps. Jared Polis (D-Colo.) and Lynn Woolsey (D-Calif.) joined Wasserman Schultz in co-signing the letter. The legislators called the Consumer Payment System Protection Act (H.R. 1081), a bill that would delay implementation by one year, "a reasonable response" for those that are concerned about the impact that interchange fees and the pending interchange fee cap will have on their constituents. That bill, introduced by Rep. Shelley Moore Capito (R-W.V.), would also direct federal agencies to study the impact that interchange changes would have on credit unions and other card issuers, consumers, and merchants. The letter notes that the interchange legislation "was not considered in committee, no studies of its effects were performed, and no separate vote was held on the provision in the House.”

Credit unions across Georgia are urging their Congressmen to support the interchange delay legislation, both in the House and in the Senate. Over 1,800 letters have been sent as of press time . . . but some legislators have received as few as 12 letters on this issue from Georgia credit unions. If you have not engaged your staff and volunteers in sending letters please do so today here.

Back to top
 
 

Dodd-Frank Author for Interchange Delay

Rep. Barney Frank of Massachusetts, who is the ranking minority member of the House Financial Services Committee as well as a key author for the Dodd-Frank Wall Street Reform Act, announced on April 5th that he would support legislative action to postpone the deadline for the Federal Reserve to issue a rule on debit card interchange fees. In his statement of support, Frank noted a recent announcement by the Fed that it would not be able to meet a statutory deadline of April 21 to propose a final rule on debit interchange fees. The Dodd-Frank Act requires the Fed to meet that deadline to propose a rule to set a ceiling on what debit card issuers may charge retailers who use that payment system. "The Federal Reserve's announcement that they cannot meet the deadline on interchange fees confirms my view that this is the only part of the financial reform bill that needs to be amended. For this reason, I support legislative action to postpone the deadline so that we can revisit it," Frank said. He did not address a July 21 effective date that is also set by the law.

 
Back to top
 
Industry News
 

‘No Free Lunch’ on Interchange

While many questions still surround the implementation of the interchange rule, Marshall Boutwell shared a gut feeling with a Georgia newspaper that probably sums up what many people in the credit union industry are thinking about the rule. "There's no free lunch," Boutwell, CEO of Gwinnett FCU, told the Athens Banner-Herald on March 20th. While the interchange rule includes an exemption for financial institutions under $10 billion, until the rule is redrafted, credit union executives like Boutwell fear its negative — even if unintended — consequences.

No free lunchCUNA has estimated that up to 67% of credit unions would lose money on their debit card programs if the interchange regulations reduced interchange-related revenues by 40%. Boutwell told the paper the value of the member service that credit unions have built their reputation on is likely to be put to the test because of these consequences. Local banks and credit unions will likely have to charge additional fees to cover the lost revenue that results from the interchange rule, though credit union fees are likely to be a bit lower than those of large banks. But Boutwell is just as concerned about the potential "blow-back" from big retailers. He fears big-box retailers like Walmart will refuse to pay 44 cents for debit card purchases drawn on credit union accounts when they only have to pay 12 cents if the their customers are using cards from big banks. In the end, the retail customer will have to pay the fee to the retailer when they swipe their card, or to the financial institution in the form of higher fees. Once again, Boutwell said, "no free lunch – for credit unions or consumers.”

And unless the rule is rewritten, he remains fearful, he told the paper. Credit unions have repeatedly said that to ensure that the planned exemption is effective; Congress should halt the progress of the interchange rule. Both the House and Senate have pending bills that would delay implementation. If an agreement to delay implementation cannot be reached, credit unions have also called on the Fed to do all it can to ensure that the proposed exemption works as Congress said it would.

Back to top
 
 

NCUA Sues to Recover Defunct CU's Land Development Losses

NCUA, as liquidating agent of the former Ensign FCU, Henderson, NV, has sued developers and individuals who entered into real estate construction loans with the credit union in 2007, two years before the credit union was shuttered due to declining financial condition. NCUA filed suit in a U.S. District Court for the District of Nevada, Las Vegas, to recover losses stemming from the developers and guarantors' failure to pay on the $1.9 million borrowed from Ensign.

The suit centers on a condominium development, Habitat Center II LLC, which entered into the construction loan agreement with the credit union on May 30, 2007, according to court documents.

Habitat Center failed to make payments on the promissory note and construction loan agreement on property in Clark County, Nev., and NCUA foreclosed the property on Nov. 1, 2010, said NCUA's complaint. The proceeds from the foreclosure sale of the property did not pay the full amount of the defaulted debt, and NCUA is seeking action based on breach of guaranty and a deficiency judgment to recoup losses, the complaint said. Ensign FCU had 7,900 members and $98 million when it was placed into involuntary liquidation on November 13, 2009, said NCUA. EDS CU of Plano, Texas, purchased and assumed Ensign's member share accounts.

Back to top
 
 
Matz
NCUA Chairman
Debbie Matz

Matz Named Chair of FFIEC

The Federal Financial Institutions Examination Council (FFIEC) has named NCUA Chairman Debbie Matz as its new leader. Matz will serve a two-year term at the helm of the council established in 1978 to promote uniformity in financial institution regulation. Matz's acceptance of the FFIEC chairmanship results in placing NCUA in the lead position for the first time in more than 20 years. Although the chairmanship is assigned on a rotating basis among the heads of the five member agencies, NCUA has declined the position in the last two decades, according to the NCUA. A spokesman said Matz accepted the responsibility because she is "committed to promoting consensus among financial regulators as they work to implement new rules protecting the safety and soundness of the financial services industry." The FFIEC is comprised of the leaders of the NCUA, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the FDIC. Matz succeeds FDIC Chairman Sheila Bair in the FFIEC position.

Back to top
 
 
State News
 

LegislatureState Legislature: What’s Left?

The state Legislature has been on recess for the week of April 4th, and will return on April 11th for one of the three remaining days, adjourning on April 14th. Still left on the agenda are significant topics such as the budget, statewide tax-shift proposal, and immigration reform, which, among other things would mandate that all employers utilize the free Federal E-Verify system to confirm newly hired employees. These issues are potentially polarizing issues to be addressed in the three remaining days. For credit unions, some of the issues that are pending are:

  • Property Registry Bill HB 110 by Rep. Mike Jacobs is currently in the Senate Rules Committee to be considered for the full Senate. HB 110 seeks to set uniform standards on how cities and counties could set up vacant property and/or foreclosure registries. The bill contains an exemption for financial institutions as owner through foreclosure from registering (and as such, being subject to the fees) provided they file the deed within 60 days with the required contact information sent to the city and/or county. The bill also maintains the preferred definition of “registered agent,” which would constitute anyone in the state as opposed to the previous language that would have required having a registered agent in the county where the property is located.
  • The Department of Banking and Finance’s Housekeeping Bill HB 239 is in the Senate Rules Committee as well, waiting to be considered for the full Senate. Among several technical clarifications, the bill resolves any conflict regarding who can serve on the credit committee of a credit union.
  • The Attorney Generals’ Robo-Signing Foreclosure Bill HB 237 is also in the Senate Rules Committee, waiting to be selected. This legislation seeks to provide the AG’s office subpoena powers over foreclosure documents.

There will be only two Senate Rules Committee meetings held before the close of the session, so the opportunities to move these bills forward are narrowing . . . and the Government Influence team continues to meet with Rules Committee members to encourage the placement of these bills on the calendar to be considered by the Senate. These are just three of the bills that are attempting to move forward among many others, and there are other pieces of legislation that are being monitored on behalf of credit unions in addition to the above. To learn more about the above bills and more that are being monitored on behalf of credit unions please access the Georgia credit union legislative tracking site. Stay tuned as the last three days will be packed with activity!

Back to top
 
 

Dept. of Revenue SealDOR to Launch Debit Card Pilot Program

The Georgia Department of Revenue announced on April 5th it will launch a Debit Card Pilot Program that it anticipates will eventually replace mailing of Georgia income tax paper refund checks. The debit cards will be mailed to select taxpayers who elected to receive a 2010 Georgia income tax paper refund check. Taxpayers who chose electronic direct deposit of their income tax refund will continue to receive their refunds electronically. Certain taxpayers will receive a debit card for the amount of their 2010 Georgia income tax refund. Upon being activated, debit card recipients can transfer the amount on their card into their financial institution account without charge, just as they would deposit a paper refund check. The debit cards can also be used to make a variety of retail transactions including payment of bills either online or over the telephone.

Back to top
 
 
Public Influence
 
England
State Rep.
Terry England

Georgia Senators Hearing Mixed Messages in Interchange

Think that the interchange battle is confined to the D.C. area? Think again. While an interchange bill has not been introduced this session as it was last session in the Georgia General Assembly, the Georgia U.S. Senators are hearing mixed messages on interchange . . . from the credit union call to action and the merchants’ opposing call to action. Added to this is both national and local press opposing, and for the supporting Georgia Senators Saxby Chambliss and Johnny Isakson for their vote on the interchange legislation last year.

Most recently on April 1st, Georgia House Chairman of Appropriations Terry England sent his message to the senators in a letter to the editor in Insider Advantage, thanking both Sens. Chambliss and Isakson for their “help on bank processing fees.” A small-business owner, England remarked that the interchange provision “keep(s) the big banks and credit card processors in line by restructuring the way that interchange (card swipe) fees are determined.” The Government Influence Team will be speaking with Rep. England to share the credit union perspective on interchange, but it is vital that everyone participate with the call to action to have the credit union voice heard loud and clear!

Back to top
 
 

WalletPop, L.A. Times Give CUs Thumbs Up on Low Fees

Articles featured Sunday in two prominent media outlets — AOL's WalletPop and the Los Angeles Times — gave a thumbs-up to credit unions' low checking fees and referred readers to websites to locate a credit union. Personal finance columnist Liz Weston, in her question-and-answer money column in the Los Angeles Times, published a letter from someone who opened a free checking account at a bank -- only to see the bank acquired later by another bank. The new bank is charging a $10 monthly service fee. The teller told the reader the huge bank doesn't have to "justify anything we do."

Weston's answer: "Goodwill doesn't count for much when banks are trying to maximize revenue." She noted "checking account fees are making a big comeback lately" because regulators are restricting one of banks' big sources of incomes: bounce fees. As a result, banks are experimenting with other fees. But, the reader has options, said Weston, who advised, "you might want to consider moving your accounts to another bank or a credit union. Credit unions are member-owned financial institutions, and many still offer free checking or have lower fees for low-balance accounts." She referred the reader to a website to locate a credit union.

In AOL's WalletPop, an article, "Fed Up With Checking Fees: Try a Small Bank," notes research that indicates 51% of respondents to an online pool would shop for another bank if their bank added a fee for checking accounts. Consumers have alternatives to large banks including credit unions, the article said. "In addition to small banks, we've also sung the praises of credit unions in the past, since they also tend to have lower and fewer fees than large banks," said WalletPop. "To find a credit union near you, check out the website of the Credit Union National Association. While credit unions are membership organizations, in many cases you only need to work, go to school or worship in a particular region to be eligible for membership," the article added.

Back to top
 
 

National Credit Union Youth Week: What’s Your CU’s Plan?

Credit unions across the nation will be celebrating National Credit Union Youth Week April 17-23 … AND the National Saving Challenge throughout the month of April. So what are your credit union’s plans for this campaign to help young people save? CUNA has a number of resources to help spread the word to young members that “Money Rocks at My Credit Union!” Click here for ideas and giveaways.

The Georgia Credit Union League will be running 30-second ads on two youth-oriented radio stations, banner ads and streaming ads online, and adding information about Youth Week to the Georgia consumer Web site, www.georgiacreditunions.org.

Be sure to get your staff and members involved in this important national campaign!

Back to top
 
 

Ten Tips for a Top-Notch Entry

In 2010, your credit union did some amazing things. Your staff raised funds for a local charity, volunteered to help the less fortunate, provided information and unique programs to spread the credit union philosophy, and even taught financial literacy to help teens and families make smart choices. Now is the time to evaluate all of those programs and select the ones that could earn your credit union statewide and national recognition among the annual industry awards programs: the Dora Maxwell Social Responsibility Community Service Award, the Louise Herring Award for Philosophy-in-Action Member Service Award, and the Desjardins and Adult Youth and Adult Financial Education awards.

 
 

As you review your credit union’s programs, consider which ones could be considered “award winning” based on the program’s creativity, implementation, staff and community participation, impact and measurable results. Here are 10 ways you can help judges get a clear picture of your program:

1. Be sure the program you’re applying for is appropriate for your credit union’s program. Dora Maxwell awards promote external programs that demonstrate a credit union’s social achievements. Louise Herring awards promote credit union philosophy that is demonstrated in an extraordinary way within the credit union. Desjardins awards acknowledge programs specifically focused on the financial education of youth and adults.

2. Review the entry form thoroughly before you complete it.

3. Follow the format of the entry form and answer all questions when describing your project. Be specific, but brief. The awards committee carefully considers the answers to questions on goals, implementation, results and coverage.

4. State clearly the goals of your program and how you accomplished them.

5. Gather all documents that show qualitative and quantitative results: the project's activities and events, funds raised and distributed, number of people served, media coverage received, hours committed, etc.

6. Contact the agencies or groups you're working with for any information they can provide on the impact your program is having on those they serve.

7. Include items you've been saving that will bring your entry to life for the judges. Photos, thank-you letters, articles, etc., all help the judges get a better look at your program.

8. Keep in mind that quality, not quantity, is the key. Choose the most representative items to include rather than everything associated with your program.

9. Be concise. The more clear and to the point your entry is, the easier time the judges will have doing their job.

10. Put yourself in the judges’ shoes. What would you look for in an entry?
The deadline to have your entry to Georgia Credit Union Affiliates is June 30th. All programs are free to enter. Click here for entry forms and information. For questions, contact Anita Paul at anitap@gcua.org or (770) 476-9625 ext. 3415.

Back to top
 
 

Statewide News Coverage

Get the latest in statewide news coverage, click here.

Back to top
 
 

CUs in the News

Get the latest in local CU coverage, click here.

Back to top
 
 

Consider This

View archives of this monthly e-news brief sent to journalists, click here.

Back to top
 
 

Paying Attention

View the quarterly report and poll of Georgia credit union members and CU trends, click here.

Back to top
 
 
News of Interest
 

GavelInterchange Suit Open . . . For Now

On Monday, April 4th, U.S. District Court Judge Lawrence Piersol denied TCF National Bank's request for a preliminary injunction to block enforcement of the Federal Reserve's proposed debit-card interchange rule. Piersol also denied the government's motion to dismiss Wayzata, Minn.-based TCF's lawsuit against the Fed that, among other things, challenges the constitutionality of the Durbin amendment. The judge is expected to hold another hearing on the case after the Fed issues its final rule. The April 4th's developments were just one step in a long legal process. The legal work will go forward, especially after the Fed issues its regulations under the Interchange Amendment – but the Fed's announcement last week about its inability to meet the April 21 rule deadline makes the timing highly uncertain.

The TCF suit, which was filed last October, alleges that portions of the Dodd-Frank Act that would require the Federal Reserve to set restrictions on debit card interchange fees are unconstitutional. Specifically, the suit states that the government cannot write laws that would force a given business to take a loss on one of its various business operations. TCF also argues that the Fed's implementation plan restricts a financial institution's ability to recover costs associated with providing the debit card service. CUNA, the Clearing House Association L.L.C., American Bankers Association, Consumer Bankers Association, The Financial Services Roundtable, Independent Community Bankers of America, Midsize Bank Coalition of America, and the National Association of Federal Credit Unions have backed TCF in its suit. CUNA and the other groups are backing TCF in an effort to explain the detrimental effect that the Fed's interchange provisions would have on the "stability of the electronic payment structure that undergirds literally trillions of dollars of our economy, as well as the serious constitutional issues the (Fed's) action raises."

Back to top
 
 

UnemploymentUnemployment Numbers Drop Nationwide

The Washington Post reported on April 1st that the unemployment rate fell to a two-year low of 8.8 percent in March and companies added workers at the fastest two-month pace since before the recession began. The Labor Department says the economy added 216,000 new jobs last month, offsetting layoffs at local governments. Factories, retailers, education, health care and an array of professional and financial services expanded payrolls. Private employers, the backbone of the economy, drove nearly all of the gains. They added 230,000 jobs last month, on top of 240,000 in February. It was the first time private hiring topped 200,000 in back-to-back months since 2006 – more than a year before the recession started. To read more please click here.

Back to top
 
 
News of the Competition
 

Bank of AmericaShareholders Sue BoA Over Foreclosure Practices

A group of Bank of America Corp. shareholders filed suit on March 28th against the bank over its foreclosure paperwork practices. The suit was filed in the NY Supreme Court in Manhattan. The suit states that the bank “did not properly record many of its mortgages when originated or acquired, which severely complicated the foreclosure process when it became necessary.” The shareholders also contend that the bank concealed its staffing was insufficient to process the huge volume of foreclosed loans, and that the mortgage problems contributed to a 42 percent decline in stock prices after the problems were disclosed. To read the Atlanta Business Chronicle article on this suit, please click here.

Back to top