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Happy Labor Day!

We hope you enjoy Labor Day, a commemoration dedicated to the social and economic achievements of American workers. Take time to celebrate the contributions workers have made to the strength, prosperity and well-being of our country. Click here to learn more about Labor Day.

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Hike the Hill in October

U.S. CapitolMake plans today! The “Hike the Hill” meeting for 2011 will be held October 4th through 6th in Washington, D.C. This event provides a high-visibility opportunity for credit unions to discuss the issues of industry importance with the Georgia Congressional delegation at our nation’s Capitol. There is no registration fee for this coordinated grassroots effort. Please contact Cindy Connelly at (800) 768-4282, ext. 3421 or via e-mail at cindyc@gcua.org if you or members of your team would like to participate.

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Washington, D.C. News

Hike the Hill in October
Rep. Ackerman to Introduce Bill to Subsidize Home Purchases
Jobs Plan May Include GA Influence, but Will It Include MBL?
Government-Backed Refinance Proposal in Works
Fact or Fiction Chain E-mails: One Percent Tax E-mails Resurfacing
CFPB Nomination Hearing

State News

New District Lines, New District, Close to the Special Session
Hike at Home Tackles Judicial Foreclosure, Lending Practices, and Regs

Industry News

Seeking an Increase in Loan Volume?
CUs Not Following Bankers' Move to Debit Fees

News of Interest

Reserve Ratio Across the Globe
Twitter Outpaces Facebook Among Financial Services Firms

News of the Competition

Financial Trends: Debit Card Fees
Biggest Bank Failure in GA = $71 Million Lawsuit

Public Influence News

GA Credit Union Members Saving More, Short on Expenses
The Street: At CUs, Consumers Fare Better in Economic Squeeze
CUs in the News
Consider This
Paying Attention
Statewide News Coverage

September 2, 2011

 
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Contact Your Legislator
 
Maximize the Power of the Media
 
State Legislative Update
 
Legislative Grids
 

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
 

Hike the HillHike the Hill in October

Make plans today! The “Hike the Hill” meeting for 2011 will be held October 4th through 6th in Washington, D.C. This event provides a high-visibility opportunity for credit unions to discuss the issues of industry importance with the Georgia Congressional delegation at our nation’s Capitol. There is no registration fee for this coordinated grassroots effort. Please contact Cindy Connelly at (800) 768-4282, ext. 3421 or via e-mail at cindyc@gcua.org if you or members of your team would like to participate.

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Rep. Ackerman to Introduce Bill to Subsidize Home Purchases

ForeclosureHouse Financial Services Committee member Gary Ackerman (D-N.Y.) has shared that he will introduce legislation after the August recess intended to spur home sales and decrease the glut of 3 million unsold and foreclosed properties. Under the legislation (to be called “Homestead: Act 2,”), 2 million qualified borrowers would be offered a matching subsidy of up to $20,000 each for a down payment on single-family home purchases. The subsidy would be structured as a loan that would be forgiven at the rate of 20 percent in each of the first five years the buyer continued to live in the house. The bill also would provide a 10-year tax exemption on rental income for the first 1 million investors who buy existing single-family homes as rental properties. The program’s cost would be covered by a one-year reduction – from 35 percent to 10 percent – in the corporate tax rate on repatriated earnings. Ackerman said the tax holiday would spur U.S. companies to bring home billions of dollars that are currently parked overseas. Read more.

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Jobs Plan May Include GA Influence, But Will It Include MBL?

White HouseNext week President Obama intends to reveal the Administration’s much-anticipated new jobs agenda. The President has stated that he will “be laying out a series of steps that Congress can take immediately to put more money in the pockets of working families and middle-class families, to make it easier for small businesses to hire people, to put construction crews to work rebuilding our nation’s roads and railways and airports, and all the other measures that can help grow this economy.”

Ask most credit union advocates and they will point to increasing the MBL limit placed on credit unions as a way to help middle-class families and small businesses. During the August recess, the credit union grassroots activity has not taken a break. Credit union leaders from across the country have been attending town hall meetings held by U.S. Representatives, U.S. Senators, and even the President asking for an increase in the MBL cap. CUNA has been working with the Treasury and the Economic Advisory Council and running ads in key legislative states. SendAnd credit union advocates have held in-district meetings with their Congressional leaders (such as the Hike at Homes that have been held here in Georgia), and over 1,600 messages to Congress have been sent by Georgia credit union advocates on increasing the cap. To engage your credit union in the call to action, please click here.

In addition to growing jobs and helping small businesses, the administration is also developing programs to target long-term unemployment, potentially including a version of the training programs in place here in Georgia. At the same time, the President may announce new programs to lift the housing market (see related article below). To read the August 29th Washington Post article on the upcoming jobs plan, please click here.

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PercentGovernment-Backed Refinance Proposal in Works

The New York Times reported on August 24th that the Obama administration is considering further actions to strengthen the housing market. One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent. The article shared that a wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds. Administration officials said on August 24th that they were weighing a range of proposals, including changes to its previous refinancing programs to increase the number of homeowners taking part. They are also working on a home rental program that would try to shore up housing prices by preventing hundreds of thousands of foreclosed homes from flooding the market. That program is further along – the administration requested ideas for execution from the private sector earlier this month.

Refinancing could have far greater breadth, saving homeowners an estimated $85 billion a year. Despite record low interest rates, many homeowners have been unable to refinance their loans, either because they owe more than their houses are now worth or because their credit is tarnished. Exactly how a refinancing plan might work is still under discussion. It is unclear, for example, whether people who are delinquent on their mortgages would be eligible or whether lenders would administer it. Federal officials have consistently overestimated the number of households that would be helped by their various housing assistance programs.

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Fact or Fiction Chain E-mails: One Percent Tax E-mails Resurfacing

Fact or fictionIn 2010 there were several inquiries about a bill that could impose a 1 percent tax on most financial transactions, including transactions with banks and credit unions. These inquiries were the result of a volume of internet traffic suggesting that the enactment of the proposal was imminent … and was highlighted in a “fact or fiction” article in the November 12th edition of Creating Influence. These chain e-mails have been resurfacing recently, prompting concern among the credit union advocates who have received these e-warnings. Here are the facts:

  • There was a bill in Congress in the previous session, H.R. 4646, that would have imposed a 1 percent tax on financial transactions if passed.
  • This bill was titled the Debt Free America Act, and was introduced by U.S. Rep. Chaka Fattah (D) from Pennsylvania.
  • In the previous session, the bill had no co-sponsors other than Rep. Fattah, was not heard in committee, and did not receive any action.
  • As this was in the previous session, the bill would need to be re-introduced to be considered.
  • While the e-mail warning some received reference a moving piece of legislation, there does not appear to be any possibility that such legislation will be enacted.

GCUA and CUNA staff will continue to monitor this and all other financial industry related bills to ensure that credit unions are protected. Please, continue to share any questions as they arise.

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Cordray
Richard Cordray
CFPB Nomination Hearing

On September 6th the nomination hearing for Director of the Consumer Financial Protection Bureau will be held by the Senate Banking Committee. As reported in previous editions of Creating Influence, Richard Cordray has been nominated by President Obama to head the CFPB. Cordray has been serving as the CFPB’s assistant director for enforcement, and had previously served as Ohio’s attorney general. Stay tuned.

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State News
 

New District Lines, New District, Close to the Special Session

GA redistricting mapOn August 31st the state Legislature brought the special session to a close with the new maps for Congressional, state Senate and state House districts completed. The General Assembly had been in session since August 15th to draw and approve the maps and last week Governor Deal signed into law the new maps for the 180 state House districts and 56 Senate districts. Changes for those maps show that Republicans could achieve two-thirds majorities in both chambers in November 2012 – enough to pass constitutional amendments without Democratic interference. While the legislature is not to return until the 2012 legislative session begins in January, the topic of redistricting is far from over.

What happens next: Once the governor signs the Congressional map, the state will submit all its new boundaries to the Justice Department for review. Georgia is one of nine states subject to the Voting Rights Act, which requires the Justice Department, or federal courts, to review all changes to voting and election laws in those states because each has a history of discrimination that hindered minority voting. Democrats have already indicated they plan to challenge the GOP-drawn maps as unfair and violating the Voting Rights Act, and it took nearly two years before the redistricting that followed the 2000 census was settled in a federal court. Dr. Charles Bullock, a University of Georgia political scientist and expert on redistricting, was not sure the Democrats' arguments would hold up under review after this year’s changes. Bullock said that the Department of Justice’s only mandate is to assure minorities are not left worse off than the status quo. According to Republicans, there are no changes in the number of "majority-minority" House districts in the new maps, while the legislators did add an additional majority-minority district for both the Senate and the congressional delegation.

What the new lines mean: With redistricting, there are perceived “winners” and “losers.” Some perceived “winners”:

  • Republicans in general who pick up a new strongly GOP-leaning 9th District, and see Democrat Congressman John Barrow’s 12th District more competitive with changes that take historically Democratic Chatham County voters out of his district.
  • Congressman Phil Gingrey, who picks up the donation-rich Buckhead area as a reward for supporting Governor Deal.
  • Democrat Congressman Sanford Bishop, who finds a more comfortable D-leaning district, and Republican Congressman Austin Scott, who finds a more comfortable R-leaning district in this new map.

Some perceived “losers”:

  • Congressman Paul Broun, who finds much of his home-base ripped apart. He will not only have plenty of new Republicans to meet but he might also have to avoid a primary fight. Congressman Broun said he is pleased he keeps parts of CSRA and the University of Georgia in the 10th.
  • Congressman Tom Price will also have to get to know a good number of North DeKalb Republicans.
  • Congressman Jack Kingston, while facing no real threat, loses some old familiar territory.
  • Congressman Tom Graves, who is new to Congress but must seek support from many new Republicans in a substantially altered district.
  • Congressman Barrow, who must face the GOP fury of a large portion of Columbia County without the protection of Chatham’s more friendly territory.
To read more click here.
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Hike at Home Tackles Judicial Foreclosure, Lending Practices, and Regs

Hike at Home - Murphy
From left: Mike Culbertson, GCUA; Julianna McConnell, GEMC FCU; State Sen. Jack Murphy; Brandee Bickle, GCUA; Cept Harden, Associated CU

On August 22nd, credit union advocates sat down with State Senator Jack Murphy, the Chairman of the Senate Banking and Financial Institutions Committee, at his Capitol office during the special session for a Hike at Home meeting. During the meeting, the credit union leaders responded to the Senator’s questions on the negative consequences for consumers and financial institutions alike if the state considered moving to a judicial foreclosure system. The Senator was very interested to hear about the lending activity by credit unions, something that the hike group highlighted as being consistent with the conservative, prudent practices that our industry has continued to exhibit … and that have “served us well.” Capping the discussions was the growing burden of financial regulations across all institutions.

The Hike at Home program is now in its third year. Each meeting is adapted to the needs of the industry and the personality and preferences of the legislator. Various issues are discussed at every hike, from visits with federal to state legislators, Democrat to Republican, small intimate meetings to large, chapter-based events. Above all, these visits are a powerful tool to strengthen the bonds that credit unions have with the individuals who can impact our industry with a single vote. Thank you to all Hikers for sharing their time at these events!
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Industry News
 

Loan applicationSeeking an Increase in Loan Volume?

Lack of loan demand … it’s a topic of conversation amongst credit unions not only in Georgia, but across the country. While there is no one-size-fits-all solution, below are a few success stories:

  • Partnering a Milestone Birthday, YouTube, and a Low Rate: In Dallas, TX, promotions related to the 75th anniversary on July 15 of Dallas-based Resource One CU have resulted in an 18 percent hike in its loan volume, with $9.38 million in gross loans. The $310.8 million asset credit union kicked off its "75 is the new 25" vehicle loan promotion, which offered 0.25 percent off all vehicle loans in July. The credit union also entered the loans in a contest for a $7,500 cash prize. To generate buzz about the celebration, employees videotaped more than 150 member testimonials, which can be viewed on the credit union's YouTube Channel.
  • Going Green, Building On Partnerships: In San Jose, CA Technology CU is offering two new solar loan programs for homeowners installing solar energy panels. Called Solar $mart, the loans complement Tech CU's work with the Bay Area Climate Collaborative on SunShares, a program through which residents and businesses receive discounts on their solar energy purchases by taking advantage of group buys from solar providers. Regional expansion of SunShares builds upon a pilot program the City of San Jose began for its employees in 2010. The credit union offers two loan options: The Solar $mart Home Equity Line of Credit, a secured loan that provides financing up to 80 percent loan-to-value with credit limits from $5,000 to $75,000; and the Solar $mart Unsecured Loan, which offers 10- or 20-year term loans from $10,000 to $50,000.
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CUs Not Following Bankers' Move to Debit Fees

Credit Union Times reported on August 24th that the new debit and checking fees being rolled out in test markets across the U.S. (and here in Georgia) by some banks provide an opportunity for differentiation by credit unions. This was the assessment by Raddon Financial Group, which has been tracking the moves by Chase, Wells Fargo and others that are imposing debit fees to recoup interchange revenue under Dodd-Frank (see related article under News of the Competition). Raddon is anticipating that 95% to 100% of credit unions will avoid the fees … for now, as interchange income is anticipated to drop. To read more please click here.

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News of Interest
 
GlobeReserve Ratio Across the Globe

In China, banks will be required to hold more types of deposits in reserve, tightening credit conditions further. With the official bank reserve requirement ratio now at 21.5 percent, the move could take around $125 billion out of the system by the time it is fully implemented in February. To read the August 29th Wall Street Journal article on this, please click here.

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Twitter Outpaces Facebook Among Financial Services Firms

Twitter has surpassed Facebook as the most popular third-party network employed by financial services companies, according to research conducted by New York-based Corporate Insight, a strategic marketing firm. As of August 1st, 67 percent of the financial services firms Corporate Insight tracks have a presence on Twitter. That's a 10 percent increase in 10 months, company officials said. During the same time period, the percentage of financial services firms with Facebook pages increased by 3 percent to 59 percent. "In our opinion, Facebook is more of a relationship-driven community whereas Twitter is more content-driven," Corporate Insight senior analyst Alan Maginn said. "Facebook is a more challenging environment for businesses because in order to be successful they must foster a relationship with their fans. With Twitter, they can concentrate more on the value of the content they produce." Read more.

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News of the Competition
 

New feesFinancial Trends: Debit Card Fees

The August 22nd Atlanta Journal-Constitution posed the question “Not happy about bank fees? Better get used to it.” The article highlighted some of the nation’s largest banks that have launched or are considering charging fees when consumers make purchases with their debit cards:

  • Wells Fargo, Atlanta’s second-largest bank in terms of deposits, has announced it will test a $3 monthly fee for debit card use for customers this fall in Georgia and four other states.
  • Atlanta-based SunTrust Banks, the city’s largest bank, launched new account offerings in June, including Everyday Checking that charges customers $5 per month for debit card use.
  • Regions Bank recently announced a debit fee of $4 a month for certain accounts in October.

More banks likely will follow suit because regulatory changes have cut into bank fee revenue, said Ed Sibbald, a former banker and director of the Center for Financial Excellence at Georgia Southern University. Many community banks, online banks and credit unions are among the fee-less alternatives, but that could change.

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Biggest Bank Failure in GA = $71 Million Lawsuit

Federal regulators sued 17 former directors and officers of Silverton Bank on August 22nd, accusing the officials of negligence and corporate waste in the biggest bank failure in Georgia history. The FDIC has accused the bank of slipshod lending practices that violated its internal controls, and for lavish spending as the bank’s condition worsened. Among the spending:

  • a posh $35 million headquarters building complete with 26 conference rooms, and
  • millions for an aircraft hangar and two new airplanes.
The suit also contends the former CEO glossed over problems and that the bank “ignored ominous warning signs in the economy,” pursuing growth in real estate loans in 2009 as the economy fell into the nation's worst-ever recession. FDIC seeks $71 million in damages, and the case is the third liability lawsuit filed against the insiders of a failed Georgia bank since the crisis started. The FDIC said it lost $386 million from Silverton’s failure. To read the Atlanta Journal-Constitution article, please click here.
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Public Influence News
 

Piggy bankGA Credit Union Members Saving More, Short on Expenses

Georgia's credit union members are saving more, but would still be short on their ability to pay long-term expenses if they lost their income, according to the most recent Georgia Credit Unions "Paying Attention" poll. Georgia Credit Union Affiliates (GCUA) compiles the quarterly report based on poll responses from more than 6,000 credit union members and from aggregated data from credit unions statewide. More than half (52%) of Georgians polled could not cover essential expenses for more than three months, and more than three-fourths could not do so for more than a year. However, that's an improvement from survey results a year ago, when 76.3 percent indicated they couldn't survive more than three months, said GCUA. This report was shared with the media, and has already surfaced in publications. To read the full report, please click the above link.

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SqueezeThe Street: At CUs, Consumers Fare Better in Economic Squeeze

Credit union members are a "bit more comfortable" in the recession than bank customers are, thanks largely to credit unions' superior rates, according to The Street.com (Aug. 22). Low deposit rates have hit everyone, but "if you look only at credit unions, the numbers tell a different story," said the article, citing the Credit Power Index. At the end of July, credit unions' Index figure stood at 17.55 – nearly 5 points lower than the national average and more than 5.5 points better for consumers than the interest rate climate found at banks. Credit unions "beat banks on deposit rates across the board." Banks have better mortgage rates, but on fixed mortgages in December, credit unions and banks were in a “dead heat." However, credit unions had the advantage in that they typically charge lower fees as well.

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CUs in the News

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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Paying Attention

View the current issue as well as archives of this quarterly report, click here.

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Statewide News Coverage

Get the latest in statewide news coverage, click here.

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