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Congressman Woodall Co-Sponsors
Interchange Delay Legislation and MBL

Woodall
From left: Keith Pritchard, Georgia-Florida United Methodist FCU; U.S. Rep. Rob Woodall; Matthew Shepherd, Delta Community CU; Stacy Tallent, Health Center CU, and Tad Gomez, Health Center CU

As implied in his speech to Georgia credit union leaders at the GCUA Annual Convention in Savannah earlier this month, Georgia Congressman Rob Woodall has become a co-sponsor of the interchange delay legislation in the House (H.R. 1081), and is the first Republican Congressman from Georgia to sign onto the bill. Rep. Woodall joins both Georgia Reps. David Scott and Hank Johnson on the bill that seeks to delay the Federal Reserve’s debit interchange regulation. We thank these legislators for their support. As of May 23rd, the House interchange delay legislation has 94 co-sponsors (52 Republicans, 42 Democrats), plus the sponsor, U.S. Rep. Shelley Moore Capito (R-WV). See the below related article for additional interchange activity in the Senate.

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Washington, D.C. News

Congressman Woodall Co-Sponsors Interchange Delay Legislation and MBL
Senator Tester to the Senate: 15-Mo. Interchange Delay Is 'Bare Minimum'
Retailers Feel the 'Heat' on Interchange
House Democratic Lawmakers Seek Warren's Appointment as CFPB Director
Want a Quick Look at What's Happening? Check Out Our Legislative Grids

State News

Governor Signs Bills of Industry Interest Into Law
Mortgage Fraud Continues to Decline in Georgia

Industry News

NCUA Advises CUs on Security Breach Prevention
CFPB Unveils Two Draft Mortgage Disclosure Forms
Pew Study Puts CU Cards Ahead of the Pack

Public Influence News

ABC Says, 'Check Rates, Services to Compare Credit Unions'
Industry Awards Deadline Approaching: June 30th
CUNA Contributes to Bankrate Debit Card Advice
Cheney Promotes aSmarterChoice.org on the Airwaves
Paying Attention: Georgia Consumers Reluctant to Spend, Look to Bolster Savings
New CUs for Kids Website Live
CUs in the News
Consider This
Statewide News Coverage

News of Interest

The Number of Foreclosures on the Books

News of the Competition

USA Today: Big Banks Hit Customers with Higher Fees
LA Sues Bank Over Foreclosure Blight

May 27, 2011

 
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AMERICA'S CREDT UNIONS

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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
 

Congressman Woodall Co-Sponsors Interchange Delay Legislation and MBL

As implied in his speech to Georgia credit union leaders at the GCUA Annual Convention in Savannah earlier this month, Georgia Congressman Rob Woodall has become a co-sponsor of the interchange delay legislation in the House (H.R. 1081), and is the first Republican Congressman from Georgia to sign onto the bill. Rep. Woodall joins both Georgia Reps. David Scott and Hank Johnson on the bill that seeks to delay the Federal Reserve’s debit interchange regulation. We thank these legislators for their support. As of May 23rd, the House interchange delay legislation has 94 co-sponsors (52 Republicans, 42 Democrats), plus the sponsor, U.S. Rep. Shelley Moore Capito (R-WV). See the below related article for additional interchange activity in the Senate.

Go buttonShowing strong support of the credit union Congressional initiatives, Congressman Woodall also has become the first Republican Congressman from Georgia to sign onto the Small Business Lending Enhancement Act of 2011 (H.R. 1418). This legislation seeks to raise the credit union member business lending cap to 12.25% to 27.5% of assets, and Rep. Woodall joins Reps. Sanford Bishop, Hank Johnson, and John Lewis on the bill. As of May 23rd there are 32 co-sponsors as well as the sponsor (12 Republicans, 21 Democrats).

To send letters to either thank your legislators for sponsoring these two credit union initiatives, or urge those that have not signed on as of yet, please click here to reach out to your legislators on the credit union calls to action: Member Business Lending, Interchange Delay (Senate) and Interchange Delay (House). Your voice is needed on this issue; share this with your team today!

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Senator Tester to the Senate: 15-Mo. Interchange Delay Is 'Bare Minimum'

On Wednesday, May 18th, Sen. Jon Tester (D-Mont.), sponsor of a bill to postpone implementation of a statutory debit card interchange fee cap, went to the Senate floor to once again speak in favor of his legislation. He announced that he would adjust his proposed two-year delay to 15 months to win over critics.

SenateTester, who along with Sen. Bob Corker (R-Tenn.) drafted S. 575 to delay the fee cap, said the adjustment would reflect feedback from some Senate colleagues that a 24-month delay is too long.

"Sen. Corker and I have decided to shorten the timeframe from 24 months to 15 months," Tester noted in his remarks. He added, however, that he considered 15 months to be the "the bare minimum" to get a study of the issues "right." Click here to read Senator Tester’s floor statement.

The 15-month delay would be broken into three periods: six months to study issues surrounding government imposition of a cap on what card issuers may charge for use of the debit card system, six months for the Federal Reserve to rewrite rules to implement the Dodd-Frank Wall Street Reform provision, and three months to implement rules.

Tester also used his time on the Senate floor to underscore the devastating impact of the Fed's currently proposed rule – capping fees at seven to 12 cents per transaction – could have on credit unions and other small, community-based financial institutions, and also on consumers. He said either debit card issuers would pass costs left uncovered by the low cap on to consumers – whom Tester said can ill afford it – or risk financial problems of their own.

He noted that federal and state regulators have repeatedly voiced concerns that a provision meant to exempt small issuers under $10 billion in assets from the reaches of the interchange law is unlikely to work to that end. "(Fed Chairman Ben) Bernanke just last week said he's still not sure whether the small issuer exemption would work, saying, 'There are market forces that would work against the exemption.' Chairwoman (Sheila) Bair of the (FDIC) has raised similar concerns about the workability of the small issuer exemption. So has Chairwoman Debbie Matz of the National Credit Union Administration. So has the Conference of State Banking Supervisors. So has the National Association of State Credit Union Supervisors," Tester said.

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FlamesRetailers Feel the 'Heat' on Interchange

Retailers seem to be feeling the heat from credit unions and others urging a delay of a statutory cap on debit card interchange fees – which seems to have caused them to escalate their fight to protect their legislative gains. On May 18th, the National Retail Federation announced that it is starting a two-month lobbying and advertising blitz to ensure that the Federal Reserve proposed debit card interchange rules goes into effect in July. Without legislation to push back the effective date, the cap is set to go into effect July 21. The campaign will include a June fly-in that will bring hundreds of business owners to Washington, D.C., to meet with members of Congress; media briefings and interviews with national and local news outlets; and a nationwide print and radio advertising. Read more.

Since March 15, credit unions nationwide have generated more than 320,000 direct contacts with members of Congress in support of bills by Sen. Jon Tester (D-Mont.) and Rep. Shelley Moore Capito (R-W.Va.) to delay and study the law and proposed rules. Congress is listening to credit unions and seems to be hearing our message, but we need to continue to speak out. If you have not yet written to your members of Congress, please do so today HERE as time is running short and July 21st is right around the corner.

At issue is a plan by the Federal Reserve Board to implement the Dodd-Frank Wall Street Reform Act cap on debit and interchange fees at seven to 12 cents per transaction. Credit unions acknowledge that there should be sensible reform of interchange fees. However, this amendment was drafted with no time for legislators to study its impact, review what the true costs are to institutions providing cards, and provide ample time to write new rules. The Federal Reserve Board's proposal carries no enforcement mechanism to ensure that a small-issuer exemption works and, therefore, credit unions and small community banks will be affected by the regulation in a manner that Congress did not intend.

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House Democratic Lawmakers Seek Warren’s Appointment as CFPB Director

Reps. Carolyn Maloney (D-N.Y.), Keith Ellison (D-Minn.) and Brad Miller (D-N.C.) are asking their House colleagues to sign a letter that urges President Obama to use every available option – including a recess appointment, if necessary – to ensure that Elizabeth Warren becomes the Consumer Financial Protection Agency’s first director. Warren, a Treasury Department adviser and Harvard Law School professor, is currently overseeing the establishment of the CFPB. Read the letter.

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ToolsWant a Quick Look at What’s Happening?
Check Out Our Legislative Grids

Have you ever wanted a quick way to find out what are the hot issues and positions on legislation? GCUA now has a tool to help you stay informed. Under the Advocacy area of the GCUA site there are legislative grids for both federal and state issues. These grids are updated quarterly at a minimum and more often when developments occur on a specific issue. The grids include a recap of the issue, where legislators stand on the issue, and also what, if any requests for grassroots help has gone out to credit unions. Click here to see the current grids.

 
State News
 

Gold DomeGovernor Signs Bills of Industry Interest
Into Law

The “signing period” for legislation passed by the General Assembly is now completed. Once a legislative session ends, the governor has 40 days to sign or veto any legislation passed by the General Assembly. Any eligible bill that the governor does not sign or veto automatically becomes law after day 40. Gov. Nathan Deal signed into law several bills, including the budget for next year, before leaving for his European trade mission, and also used his line-item veto to kill 11 college construction projects in the budget, according to details his office released on May 17th. The Governor also vetoed eight bills, ranging from coin-operated games to campaign disclosures. For the credit union perspective, several constricting (and in some instances, counterproductive) bills that were introduced this session were not among those considered by the Governor, as they did not make it out of the Legislature. These bills ranged from attempts to increase the bankruptcy exemptions, change consumer finance practices, and multiple attempts to alter the foreclosure process (See the April 22nd edition of Creating Influence for full details). Those bills of interest to credit unions that passed and were signed into law were:

  • The Department of Banking and Finance’s Housekeeping Bill HB 239 by Rep. Greg Morris from Vidalia was signed into law on May 11th. This law addresses several non-controversial technical changes, including a provision that reconciles any conflict between O.C.G.A. §§ 7-655(c) and 7-1-658(3) regarding who can serve on the credit committee of a credit union.
  • Standardized Insurance Certificate Bill HB 66 by Rep. Howard Maxwell from Dallas was signed into law on May 11th and is effective on July 1st. This law mirrors the January 10th directive by the Insurance Commissioner on their new process of creating/approving forms to be used to provide evidence of an insurance policy’s existence. This legislation was amended early in the process to ensure that financial institutions are notified in the event of a lapse in coverage.
  • Immigration Reform HB 87 by Rep. Mat Ramsey from Peachtree City was signed into law on May 13th and is effective on July 1st. This law institutes changes to public and private employers, and law enforcement investigations. Of note to credit unions: this law will require all private employers in Georgia with 10 or more employees to participate in the federal E-Verify system. The online federal database that allows prospective new hires to be checked for the legal status of their residency in America. A provision to protect businesses was added in the process to provide a 30-day grace period to correct any good faith violations. While many credit unions already utilize E-Verify, it is important to re-visit your hiring procedures to ensure compliance.
  • MVR Security Interest Bill HB 323 by Rep. Michael Harden from Toccoa was signed into law on May 11th. This law expands the period of time in which a motor vehicle security interest is perfected from 20 to 30 days.
  • Abandoned Vehicles Lien Bill HB 114 by Rep. Alan Powell from Hartwell was signed into law on May 13th and is effective on July 1st. Originally only focused on limiting what cities and counties could charge to place a lien on abandoned vehicles, it was amended in the legislative process to include language from a similar bill by Rep. Powell, HB 113, which allows towing companies to place a lien on vehicles and the contents to cover towing and storage fees.

One bill the Governor vetoed on May 13th was the Individual Development Accounts Bill HB 226 by Rep. Donna Sheldon from Dacula. This bill, which is the identical bill that was sought in 2010 but failed during that session, allows for IDA accounts for the disabled. The Governor stated in a release that while he agrees with the intent of the bill, he feared the language was overly broad and the oversight for how the accounts would be managed was inadequate. Watch for this legislation to return again with a more narrow focus in the 2012 session. The Government Influence Team will continue to monitor this and all other legislation to ensure that credit unions are not negatively impacted.

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Mortgage Fraud Continues to Decline in Georgia

On May 24th the Department of Banking and Finance issued a press release about the decline of mortgage fraud in Georgia. Click here to read the release. According to the latest figures released by the LexisNexis® Mortgage Asset Research Institute (MARI) in their May 2011 report, mortgage fraud in Georgia has decreased significantly over the past year. Georgia is no longer ranked in the top 10 for mortgage fraud. The full report released by LexisNexis, as well as previous years’ reports, are available at: Mortgage Asset Research Institute - LexisNexis®.

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Industry News
 

NCUA Advises CUs on Security Breach Prevention

NCUA logoFollowing a number of recent high profile security breaches, NCUA has reminded credit unions of the appropriate security incident prevention and detection steps needed to protect and secure member information. The agency in a release noted that federally insured credit unions "should have robust enterprise risk management practices in place to maintain member data integrity and confidentiality," including "risk assessment, risk mitigation and controls, and risk measuring and monitoring." Credit union risk assessment activities should include reviews of information security programs.

NCUA said that credit unions could increase their preparedness for these types of attacks by reviewing recent releases by the National Security Agency (NSA) and the United States Computer Emergency Readiness Team's (US-CERT) Early Warning and Indicator Notice (EWIN). The advisories cover the controls needed to restrict and monitor outside access to sensitive information, systems, and control components, and cover web domains that are associated with incidences of malicious activity.

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CFPB Unveils Two Draft Mortgage Disclosure Forms

Know before you oweOn May 18th, The Consumer Financial Protection Bureau unveiled two drafts of a single mortgage disclosure form that would merge Truth in Lending Act and the Real Estate Settlement Procedures Act disclosures as required by the Dodd-Frank Act. Under Dodd-Frank, the revision and combination of these forms is due by July 21, 2012. While the comment period ends on Friday, May 27th, the CFPB will continue to gather feedback through meetings and gather additional comments once it releases an updated mortgage disclosure proposal, which is expected next month.

Each draft prototype form has a different design that breaks down the mortgage offer, highlights key terms, such as interest rate and projected monthly payment, and also cautions borrowers about certain terms, including balloon payments. The CFBP will conduct five rounds of evaluation and revisions on the two prototype forms through September. Then it will select a single draft disclosure form and refine it. The bureau is not slated to issue a final version of the form until July 2012. CUNA is organizing a group of credit union mortgage lending experts to help review the draft form and provide feedback to the CFBP. To read more click here.

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HorsePew Study Puts CU Cards Ahead of the Pack

Credit union credit cards give consumers "a better deal across the board," generally offering lower interest rates, lower penalty charges and reduced fees, a Pew Health Group study has found. The Pew study, entitled "A New Equilibrium: After Passage of Landmark Credit Card Reform, Interest Rates and Fees Have Stabilized," used data collected between March 2010 and January 2011 to compare credit card rates and other terms offered by the 12 largest credit unions and the 12 largest banks. A credit union card also had the lowest annual percentage rate (APR) of any in the survey, with one credit union advertising a 9.99% rate. The lowest bank-offered rate came in three points higher, totaling 12.99% APR.

The study also found that credit unions had lower cash-advance charges when compared with banks, totaling as low as 10.9% at one credit union. The lowest bank cash advance rate was 24%. While the number of banks that charged a yearly account fee increased by seven percentage points over last year, the percentage of credit unions charging fees held steady at 14%. The average fee charged by those credit unions totaled $25, which was less than half of the $59 fee charged by banks. The Pew study has received widespread coverage on MSNbc.com, TIME.com, The Associated Press, Fox News and other outlets.

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Public Influence News
 
ABC Says, 'Check Rates, Services to Compare Credit Unions'

In an article appearing in the Atlanta Business Chronicle on May 20th, employers were encouraged to look into credit unions as an employee benefit. Many companies have been forced to slash benefits due to the lagging economy, but one no-cost perk that companies could offer employees is membership at a credit union. Some things for companies to look into when deciding on a credit union that’s best for them include interest rates, minimum balance requirements and loan eligibility. The article also mentioned that employers should consider whether the credit union offers a car-buying program, free financial counseling and small business loans.

The article mentions that credit unions are small financial institutions – compared with banks – so members will not find a branch on every corner. However, most belong to CO-OP Financial Services, which has 28,000 surcharge-free ATMs nationwide. Click here to read the article.

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Industry Awards Deadline Approaching: June 30th

If you haven’t already done so, now is the time to complete and submit your entries for the credit union industry awards: 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.

“You can’t win if you don’t enter,” says Anita Paul, director of communications at Georgia Credit Union Affiliates. “Remember, you’re competing against credit unions of the same asset size. Judges pay close attention to the uniqueness of the program, the results achieved by the program, and the thoroughness of the submission form.”

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. Good luck!

 

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CUNA Contributes to Bankrate Debit Card Advice

CUNA contributed to a Bankrate.com story on advice about debit cards, which was subsequently picked up by Fox Business.com and Yahoo! Finance. In an article titled "8 secrets about your debit card," Bankrate listed eight things about a debit card that consumers may not know. Please click the above link for details.

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Cheney Promotes aSmarterChoice.org on the Airwaves

CUNA President/CEO Bill Cheney launched a radio tour this week to call attention to aSmarterChoice.org, the new website CUNA and the leagues have created to help consumers learn more about credit unions and find one they are eligible to join. Cheney underscored the value and service credit unions routinely provide consumers in a series of radio interviews focused on the recent launch of aSmarterChoice.org. Later this week Cheney is scheduled to talk about the new site with the Fox News radio network and Wall Street Journal radio, among others.

"Last year consumers saved $6.5 billion in better rates and lower fees using not-for-profit credit unions rather than banks. Credit unions are the smarter choice for financial services," Cheney emphasized during the interviews."If you want to know more about credit unions, aSmarterChoice.org is a great place to start." Cheney pointed out the credit union locater tool on aSmarterChoice.org has the ability not only to show consumers which credit unions are nearby, but which ones they are eligible to join. He also discussed the new site's other major features, including basic information on credit unions, member testimonials, examples of what the media have been saying, and bank vs. credit union average rate and fee comparisons.

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Paying Attention: Georgia Consumers Reluctant to Spend, Look to Bolster Savings

The latest issue of Paying Attention focused on the trend toward savings among Georgia consumers, according to a recent consumer poll conducted by Georgia Credit Union Affiliates. Included in the report is data showing trends in transaction account balances, savings, loans and growth rates at Georgia credit unions. Findings of the survey were released to the media early this week. Below are early news reports from across the country featuring the survey.

The Sacramento Bee
http://www.sacbee.com/2011/05/24/3650502/report-georgia-consumers-reluctant.html

WTHR.com, Indianapolis
http://www.wthr.com/story/14706212/report-georgia-consumers-reluctant-to-spend-look-to-bolster-savings?clienttype=printable

Credit Union Times
 http://www.cutimes.com/2011/05/24/georgia-members-holding-on-to-current-vehicles?t=lending

News Now, CUNA
http://www.cuna.org/newsnow/11/system052411-11.html?ref=hed

The Weekly
http://www.theweekly.com/news/2011/May/24/Georgia_consumers.html

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

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CU for Kids logoNew CUs for Kids Website Live

A new Credit Unions for Kids website went live on May 16th. Credit Unions for Kids is a nonprofit collaboration of credit unions, chapters, leagues/associations, and business partners nationwide engaged in fundraising activities to benefit 170 Children's Miracle Network (CMN) Hospitals.

The website allows credit union supporters to:

  • Meet their state's Champion patient;
  • Share their personal miracle story;
  • Learn about Credit Unions for Kids national campaigns;
  • Download fundraising ideas and materials;
  • Discover best practices;
  • Find their local CMN Hospital; and
  • Reveal their Credit Unions for Kids success stories.

"The new website will be a critical component in our effort to drive both awareness and fundraising," Joe Dearborn, senior director of Credit Unions for Kids, told News Now. "The site really has something for every credit union that's interested in fundraising for their local Children's Miracle Network Hospital.”

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CUs in the News

Family Savings FCU Celebrates 60 Years
The Gadsden Times

Get the latest in local CU coverage, click here.

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Consider This

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

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Statewide News Coverage

Get the latest in statewide news coverage, click here.

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News of Interest
 

ForeclosureThe Number of Foreclosures on the Books

The New York Times reported on May 22nd on how sales are hurt as lenders hold homes in foreclosure. The article highlights the nation’s largest banks and mortgage lenders who have “steadily amassed real estate empires,” and warns of a threat to deepen the housing slump and create a “further drag on the economic recovery.” More than 872,000 homes are held on the books, and economists are foreshadowing that a rise in lender-owned homes could create another “vicious circle” leading to even more distressed sales. To read more, please click here.

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News of the Competition
 

USA Today: Big Banks Hit Customers with Higher Fees

Because of loss of revenue from new and pending regulations, the nation’s largest banks are upping many of their fees, adding new ones, eliminating rewards programs, and making it harder for customers to avoid monthly charges, according to a recent article on USAToday.com.

Big banks such as Bank of America and Chase have raised monthly fees on checking accounts, overdraft transfers, and outgoing wire transfers. They’re also making it more difficult for customers to avoid these fees by adding stipulations to their accounts. The article titled “Big Banks Hit Customers with Higher Fees, and More of Them” cites an example of Chase adding a new $12 fee monthly fee to its checking account, taking a customer by surprise.

“The situation is likely to drive more consumers to com­munity banks and non-profit credit unions,” the articles states. Michael Moebs, a banking industry economist, told USA Today that he estimates big banks will lose 13 million checking accounts nationwide in 2010 and 2011. As banks raise their fees and add new ones, “the percentage of small banks and credit unions offering free checking has risen,” the article states. “For consumers, their best choice is to take a look at community banks and credit unions,” Moebs said. Click here to read the article.

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GavelLA Sues Bank Over Foreclosure Blight

The Associated Press reported on May 22nd that communities across the nation have made little progress in getting banks to maintain foreclosed properties, and as the ongoing crisis matures and bank-owned homes fall into advanced stages of disrepair, cities and residents are getting desperate. In a keenly watched move this month, Los Angeles forged a new strategy – it sued one of the world's major financial institutions, Deutsche Bank, to force it to take care of 166 properties, both vacant and renter-occupied, charging that the blue-chip German giant has turned into the city's largest slumlord. But Deutsche and other banks say they aren't really the owners, and are not responsible for maintenance.

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