President Obama Announces Nominee to Fill NCUA
Board Position

Leon-Decker
Carla León-Decker

Late on October 20th, President Obama announced his intention to nominate a Washington, D.C.-area credit union CEO, Carla León-Decker, to fill the seat on the NCUA Board currently held by Gigi Hyland, whose official term expired this past August. The nomination requires Senate confirmation and has been referred to the Senate Banking Committee. Hyland will continue to serve until León-Decker has been confirmed.

Carla León-Decker has been CEO of District Government Employees Federal Credit Union in Washington since 2000. To read more click here for the White House Press release. León-Decker has been active in numerous credit union organizations, is a Credit Union Development Educator and a co-founder and director of the Network of Latino Credit Unions and Professionals.

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Industry News

President Obama Announces Nominee to Fill NCUA Board Position

Washington, D.C. News

Senator Isakson Introduces Bill to Include Energy Costs, Savings in Mortgage Underwriting
Isakson, Graves Propose 401(k) Access to Help Homeowners
Regulatory Accountability Bill Would Be Good for CUs
Loan Limit Language Tied to Senate Spending Bill
Lawmakers Seek Probe on Banks' New Debit Card Fees
Supreme Court to Hear RESPA Case
Sen. Johnson: No Housing-Finance (GSE) Reform This Year

State News

Georgia Attorney General Worried About Foreclosure Fraud

Public Influence News

Winners of Financial Goals Sweepstakes Announced
Local Press Touting Bank Customers' Switching Over Fees
Bank Transfer Day Gaining Momentum Nationally
Divorcing Your Bank? NBC Nightly News Reports Fee Hikes
CUs in the News
Consider This
Paying Attention
Statewide News Coverage

News of Interest

Student Loan Debt Now Exceeds Credit Card Debt
Want More Mortgage Loans?
CFPB Issues Examination Manual
CNN: Surveys Show How the Economy Is Changing Some People

News of the Competition

Profits Up 74% for Citigroup
Durbin Calls Out Wells Fargo for New Debit Fees

October 28, 2011

 
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 Industry News
 

President Obama Announces Nominee to Fill NCUA Board Position

NCUA logoLate on October 20th, President Obama announced his intention to nominate a Washington, D.C.-area credit union CEO, Carla León-Decker, to fill the seat on the NCUA Board currently held by Gigi Hyland, whose official term expired this past August. The nomination requires Senate confirmation and has been referred to the Senate Banking Committee. Hyland will continue to serve until León-Decker has been confirmed.

Carla León-Decker has been CEO of District Government Employees Federal Credit Union in Washington since 2000. To read more click here for the White House Press release. León-Decker has been active in numerous credit union organizations, is a Credit Union Development Educator and a co-founder and director of the Network of Latino Credit Unions and Professionals.

It is possible this nomination will be paired with an FDIC nominee, Thomas Hoenig, also announced on October 20th. Before taking office at NCUA, León-Decker will face the Senate Banking Committee and a full Senate vote to confirm her nomination. This appointment might make it through before the end of 2011 but with the environment of divisiveness of this Congress, it is possible that even this appointment will not get approved by year end.

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Washington, D.C. News
 
Isakson Bennet
U.S. Sen.
Johnny Isakson
U.S. Sen.
Michael Bennet

Senator Isakson Introduces Bill to Include
Energy Costs, Savings in Mortgage Underwriting

Sen. Johnny Isakson (R-GA) and Sen. Michael Bennet (D-CO) introduced the Sensible Accounting to Value Energy (SAVE) Act (S. 1737)  on October 19th that would "enable better mortgage underwriting, encourage investments in residential energy improvements and reduce home energy bills." Under the bill, federal mortgage loan agencies would consider a homeowner's expected energy costs when determining the homeowner's ability to make monthly mortgage payments. It would also enable homeowners to finance cost-effective home energy upgrades as part of their traditional mortgage, lowering their utility bills and creating consumer demand for energy-efficient homes and home improvements. To read more click here.

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BalancingIsakson, Graves Propose 401(k) Access to Help Homeowners

On October 5th, U.S. Sen. Johnny Isakson and U.S. Rep. Tom Graves (R-9th) introduced legislation (H.R. 3104 and S. 1656) known as the “Hardship Outlays to Protect Mortgagee Equity (HOME) Act” in their respective chambers. The legislation would amend the Internal Revenue Code of 1986 to provide penalty-free distributions from certain retirement plans for mortgage payments with respect to a principal residence and to modify the rules governing hardship distributions.

In addition, Senator Isakson is also co-sponsoring a bill called the Helping Responsible Homeowners Act (S. 170) intended to simplify refinancing.
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Road signsRegulatory Accountability Bill Would Be Good for CUs

Both the House and the Senate have introduced legislation known as the Regulatory Accountability Act of 2011 (S. 1606 and H.R. 3010.) The legislation would revise the Administrative Procedure Act to require agencies to consider the costs and benefits of new rules and other regulatory actions, and would require federal regulators to conduct public hearings for most rules estimated to have an aggregate impact on industry of over $1 billion. The legislation also sets new data quality standards for agency fact-finding in the rulemaking process. Click here for a summary of the legislation.

During a hearing in the House Judiciary Committee on Tuesday October 25th, Credit Union National Association (CUNA) backed the legislation by submitting a statement for the record. To read the letter click here.

Reducing regulatory burden for credit unions is a top credit union system priority, and CUNA and leagues have frequently called on the National Credit Union Administration, the Consumer Financial Protection Bureau and other federal agencies to ease the working environment for credit unions.

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Loan Limit Language Tied to Senate Spending Bill

Legislation that would return the Federal Housing Administration's (FHA) insurance limit for single-family home loans to $729,750 was approved by the Senate in a 60-38 vote, and attached to a spending bill, during the week of October 17th.

The spending bill was passed by the House earlier this year. A Senate vote on the spending bill is expected in the coming weeks after the Senate returns from recess.

The mortgage-related legislation, known as the Homeownership Affordability Act of 2011 (S. 1508) , was introduced earlier this year by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.), and co-sponsored by Sen. Dianne Feinstein (D-Calif.). The legislation would allow the FHA, Fannie Mae, Freddie Mac, and the Veterans Administration (VA) to guarantee mortgages up to $729,750, or 125% of local median prices for single-family homes, through Dec. 31, 2013.

The maximum conforming loan limit was previously set at $729,750, but fell to $625,500 on Oct. 1 when a loan limit extension could not be agreed to by Congress. The Housing and Economic Recovery Act (HERA) of 2008 requires that Congress set maximum conforming loan limits each year.

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Lawmakers Seek Probe on Banks' New Debit Card Fees

The political maneuvering is alive and well in Washington… While we reported in the last Creating Influence on a bill to repeal the Durbin amendment, the other side was busy finding their supporters to question the implementation of new debit fees by banks.

New card feesDemocratic lawmakers asked the Justice Department to see whether Bank of America and other major banks improperly worked together to charge customers new monthly fees for using their debit cards.

Rep. Peter Welch (D-Vt.), and Reps. John Conyers (D-MI), Keith Ellison (D-Minn.), Mike Honda (D-CA) and Raul Grijalva (D-AZ) have called on Attorney General Eric Holder to investigate if big banks are [were?] coordinating their fee strategies in violation of federal antitrust laws before they announced the fees. Welch said the lawmakers have no evidence of collusion. But he said the timing of the fees merits an investigation.

The lawmakers said statements made by some banks and their trade associations raise questions about possible coordination. In a letter to Holder, the lawmakers cite an e-mail by the Texas Bankers Association to its members. The e-mail was sent after legislation failed that would have delayed the cap on swipe fees. It has been reported that the e-mail said: "Now the industry must regroup and each and every one of you must decide how you are going to pay for the use of debit cards. It may be through a monthly fee."
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ScalesSupreme Court to Hear RESPA Case

The U.S. Supreme Court recently agreed to decide whether the Real Estate Settlement Procedures Act (RESPA) bars mortgage lenders from charging "unearned fees" at closings. The case – Freeman v. Quicken Loans Inc. – centers on a group of lawsuits from Louisiana in which borrowers alleged Detroit-based Quicken charged them loan-discount fees but did not provide reduced interest rates in return.

The New Orleans-based 5th U.S. Circuit Court of Appeals ruled last year that RESPA bars lenders and other service providers from paying or receiving kickbacks, but it doesn't bar unearned fees charged by a single party. Quicken said the fees were legal and denied allegations that they were unearned.

The high court's decision is likely to set a precedent for whether RESPA will be applied as a blanket prohibition on unearned fees or a more limited statute barring kickbacks. The American Banker from October 18th noted that the case has major implications for other lenders and could affect everything from what lenders charge borrowers for credit reports, to fees charged for appraisals and other services.

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Sen. Johnson: No Housing-Finance (GSE) Reform This Year

Senate Banking Committee Chairman Tim Johnson (D-S.D.) confirmed during a hearing the week of October 17th that the committee will not undertake reform of the housing finance system this year. "I firmly believe that we need to reform our housing-finance system but I am concerned about the unintended consequences for our housing market and economy that could result," Johnson said. "A new system that eliminates the most popular and stable mortgage product in the country would be a step backward."

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State News
 
Olens
Georgia Attorney General Sam Olens

Georgia Attorney General Worried About Foreclosure Fraud

Recently Georgia Attorney General Sam Olens sat down with The Atlanta Journal-Constitution to share his legislative priorities for the 2012 session. He mentioned that in addition to H.B. 397, the proposed rewrite of the state’s sunshine laws, his office’s priorities for the upcoming session include addressing foreclosure fraud and the growing number of pill mills opening in Georgia. The Government Influence Team will be working to ensure that any legislation doesn’t pose any unintended consequences to credit unions. To read the article click here.

The Government Influence Team has met with both Senator Bill Hamrick, Chairman of the Senate Judiciary Committee, and Representative Wendell Willard, Chairman of the House Judiciary Committee, within the last 30 days. These committees would most likely be where any foreclosure bills will be heard. Neither Senator Hamrick nor Representative Willard is aware of any overreaching foreclosure bills in development and both gave assurances that the credit union position against judicial foreclosure is understood and supported. Any proposals to change the current foreclosure laws will continue to be monitored to identify any negative effects on credit unions.
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Public Influence News
 
ICU Day logoWinners of Financial Goals Sweepstakes Announced

Each year, credit unions around the world celebrate International Credit Union Day in October. This year, Georgia credit unions celebrated by giving away money to their members. In a statewide Financial Goals Sweepstakes, 39 Georgia credit unions representing nearly half of the 1.8 million credit union members in the state collaborated to find out what their members’ top financial goal is for the next 12 months.

More than 6,500 responses were received from credit union members across the state. Georgia credit union members accessed the sweepstakes link from the websites of participating credit unions. With one click, members selected their top goal from a list, or inserted a different goal. They indicated the name of their credit union, along with minimal demographic information, and submitted their entry. From the thousands of entries, three winners were randomly selected to win cash prizes.

Of the responses, 49 percent of members said their top 12-month goal is to pay down debt; 16 percent said they hope to increase savings; 6 percent said their goal is to buy a home, and 5 percent have a goal of buying a car in the next year.
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Local Press Touting Bank Customers' Switching Over Fees

On Sunday, October 16th, The Atlanta Journal-Constitution published an article about the recent frustration with consumers over the implementation of debit card fees. In the article, staff from both Delta Community CU and LGE Community CU described the influx of new members because of consumers’ frustration with the banking industry. Click here to read the article. Other media coverage has been garnered on this topic as well and can be found on the Statewide Public Relations Coverage page of the GCUA website.

 

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Close our accountsBank Transfer Day Gaining Momentum Nationally

You might have heard about Bank Transfer Day, coming up next Saturday, November 5th. It is a national effort to encourage consumers to move their accounts from a bank to a credit union. The idea was sparked by an individual bank customer in California, and has gained nationwide attention – with nearly 60,000 Facebook fans and more than 330,000 people invited by their friends to sign up.

GCUA and CUNA have created background information and talking points to provide information about the event, and to assist your credit union in answering inquiries from potential members and/or your local media. Please share this information with your entire credit union staff and board.

Bank Transfer Day is by no means a credit union movement event, nor is there any requirement for credit unions to participate. However, GCUA would like to know if your credit union has plans to participate in any way. Please complete this brief poll to indicate your credit union’s intentions regarding Bank Transfer Day. Click here to access the poll.

If you have questions, please contact the GCUA Public Influence Team:
(770) 476-9625
Anita Paul, ext. 3415
Kristi Arrington, ext. 3451
Diana Houston, ext. 3429

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Divorcing Your Bank? NBC Nightly News Reports Fee Hikes

In a story about the newly announced fees that some banks are charging customers, NBC’s Nightly News reported that consumers have several options for their banking needs … switching to a credit union is one.

The report cited the astronomical rise in fees at banks, including:

  • In 2010, 65 percent of non-interest checking accounts were FREE (source: www.bankrate.com). That rate plummeted to just 45 percent in 2011.
  • In 2010, the average account maintenance fees were $29.88. Those fees jumped to $52.44 in 2011.
  • In 2010, the minimum balance a customer needed to maintain to avoid maintenance fees was $249. In 2011, that minimum balance rose to $585.

Click here to view the story.

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CUs in the News

Should I move to a credit union or a smaller local bank?
Fox 31, Albany

United 1st Credit Union helps elementary school kids learn financial smarts
Jacksonville.com

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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News of Interest
 

Loan debtStudent Loan Debt Now Exceeds Credit Card Debt

Students and workers seeking retraining are borrowing extraordinary amounts of money through federal loan programs, increasingly going into deep debt in hope of landing a job in this tough economy. USA Today cites a Federal Reserve report that shows student loan debt has now exceeded credit card debt, mainly because Americans are taking advantage of federal loan programs to build new careers.

More than $100 billion was taken out in student loans last year and outstanding student loans will exceed $1 trillion this year. The average loan was $4,963 last year, up 63 percent, adjusting for inflation, from a decade ago. A report issued by the Federal Reserve Bank of New York says that Americans now owe more on student loans than on credit cards.

On October 26th, the administration announced a plan to help students deal with their student loan debt. The plan will allow college graduates to cap federal student loan repayments at 10 percent of discretionary income starting in January, two years before the cap was due to take effect under federal law. Click here to read about the proposal.
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Money and housesWant More Mortgage Loans?

Lenders with competitive online rates, optimized websites and integrated point-of-sale (POS) platforms are best positioned to succeed in attracting mortgage loan applications, according to a study of consumer-direct online mortgage applications submitted in 2010 to mortgage lenders. In one segment of the study, the Benchmarks 2011 Report by Mequon, Wis.-based Mortgagebot, such lenders garnered eight times more application volume than their less successful counterparts. The study aimed to identify methods that optimize lenders' online presence and maximize application volume. In the study, about 40% of lenders surveyed take more than 25% of their loan applications online. Other trends:

  • Mortgage shoppers actively research interest rates online. Fifty-four percent of visits to lenders' sites were to check rates, suggesting that lenders must "present accurate, risk-based pricing and detailed fee quotes to meet borrower expectations," said Mortgagebot.
  • Mortgage shoppers will devote time to complete online loan applications. More than one in six visitors spends more than 16 minutes on a lender's website, excluding visits that were less than a minute. If shoppers don't have enough time to complete the transaction, they will come back – 48% of applications were submitted over multiple sessions, with 90% of the returning users submitting their application within two weeks of starting it.
  • Mortgage shoppers are highly inclined to submit applications online. Give a simple, optimized application experience, 72% of online borrowers who were eligible to complete their loan application online chose to do so.

With the data, lenders "can benchmark the success of their websites and pinpoint methods proven to be most effective in increasing loan volume," said Allen. "And mortgage lenders that have not embraced the online channel can see what's possible with the right tools." Online applications in 2010 in the report had a median credit score of 757, a median household income of $90,000, a median borrower age of 42, and a median loan-to-value ratio of 70%. Other findings:

  • Borrowers want to apply on their own terms. More than one in three consumers elects to apply online during non-business hours, when branches are closed.
  • Simple navigation increases the likelihood of capturing applications. A panel of testers took 24% more time and 24% more clicks to reach the application entry page at less successful sites. More successful sites reaped eight times more loan volume.
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CFPB Issues Examination Manual

While no Georgia credit union is under the supervision of the Consumer Financial Protection Bureau… it might be of interest to see what the CFPB, in its newly released supervision and examination manual, lists as the three main principles that will guide bureau exams: focusing on risks to consumers; analyzing available data about supervised entities; and enforcing consumer financial law consistently.

The Dodd-Frank Act gives the CFPB the authority to supervise financial institutions with more than $10 billion in assets for compliance with consumer regulations (only three credit unions nationwide). The agency also is authorized to supervise nonbanks, but not until it has a permanent director. Read and download the manual.

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CNN: Surveys Show How the Economy Is Changing Some People

Two new surveys reveal the financial slump's upside: Some consumers are smarter about managing money. Read the story. As a result the article details a few smart financial moves consumers should make now. Among them:

  • Don’t play it too safe - focusing too much on avoiding losses rather than growing your portfolio may leave you short of your long-term financial goals,;
  • Find the happy medium – don’t go overboard on frugality, you won't be able to stick with it, or you'll end up depriving yourself unnecessarily; and
  • Leaving a proper legacy – take the steps to protect your loved ones financially.
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News of the Competition
 

Profits Up 74% for Citigroup

On October 17th The New York Times reported that Citigroup’s earnings rose 74% to $3.8 billion … three years after needing a federal bailout to survive. This quarter’s results marked the seventh straight quarterly profit for Citigroup despite dismal results of its investment bank. To read more please click here.

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Calling outDurbin Calls Out Wells Fargo for New Debit Fees

It looks like Senator Richard Durbin is ready to take on another bank on its debit fees. Recently, Senator Durbin wrote to Bank of America about its new debit fee and on October 19th, Reuters reported that Sen. Durbin decided he needed to question why Wells Fargo & Co. is testing a new debit card fee in five states while making record profits. Durbin asked Wells Fargo to explain why it needs to impose new debit card fees when it posted a 21% increase in third quarter profits.

The bank has claimed the $3 monthly fee, which is being tested in Georgia, is a response to the cap on debit interchange fees spearheaded by Durbin as part of the financial reform law.

In a letter to Wells Fargo CEO John Stumpf, Durbin said the bank has no right to blame the new fees on the interchange amendment, and said the company will still make an estimated $1.2 billion in annual interchange fees.

Durbin also said it was surprising that Wells would test out the new fees in light of the consumer backlash against Bank of America, which announced that it would begin charging customers a monthly $5 fee for using their debit cards.

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