February 10, 2012

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Statewide News Coverage
 
Good News for Credit Unions: Garnishment Response Bill is Now Law!
Governor Nathan Deal signs into law the Garnishment Notice Response Bill HB 683, giving credit unions and other businesses the legal ability to respond to garnishment notices without utilizing an attorney. The law goes into effect immediately.

 
     
  State Legislature Moving Forward Quickly
At day 18 (of the 40 day schedule), the state legislature shows no signs of slowing its pace. Find out about new bills of note to credit unions.

 
  Opportunities to Build Influence
Credit union advocates continued to build influence with state legislators at the annual Legislative Dinner held on Feb. 7th. Read about which legislators attended.

 
  Credit Union Attempts to Move MBL Legislation a Thorn to Bankers
The National Journal Daily, a Capitol Hill newsletter, reported on the credit union's push to gain additional traction in DC for the Member Business Legislation.

 
  Georgia Part of Pilot Program: Renting Government-Owned Foreclosures
New plan would allow investors to buy pools of Georgia's more than 6,400 foreclosed homes to rent to deplete the surplus of homes and ease pressures on deteriorating prices. Georgia is second to California in the number of foreclosed homes.

 
  Looking for Possible SEG Growth Opportunities?
New forecasts from the Bureau of Labor Statistics may provide clues about the fastest-growing fields this decade.

 
  Can you Hear Us Now - NCUA Cancels February Board Meeting
On February 9th, the National Credit Union Administration (NCUA) Board announced they will cancel the open meeting that had been scheduled for Feb. 16.

 
  Congress to Address Supplemental Capital for Credit Unions
Legislation was introduced this week in the House that would permit NCUA to allow credit unions to accept additional forms of capital, provided the cooperative ownership structure of credit unions is not altered as a result.

 
  'Landmark' Mortgage Fraud Settlement Announced
An agreement has been reached on a $25 billion dollar settlement on foreclosure practices with five of the top banks in the country.

 
  Your Talking Points
Credit union spokespersons receive talking points on top stories shared with media throughout the state.

 
  CitiBank to Stop Originating Home Loans through Mortgage Brokers
CitiBank announced it will stop originating home loans through brokers, an indicator of how the financial crisis is reshaping the mortgage industry.

 
 
 
Good News for Credit Unions: Garnishment Response Bill is Now Law!
Left to Right: Rep. Wendell Willard, Governor Nathan Deal, Sen. Charlie Bethel

On Tuesday, February 7th Governor Nathan Deal signed into law the Garnishment Notice Response Bill HB 683 which was sponsored by Representative Wendell Willard (R-Sandy Springs). The bill is effective immediately. Credit unions and other businesses now have the legal ability to respond to garnishment notices without utilizing an attorney (and having that added expense). Our thanks to the State Legislature for responding to this need, and moving so quickly on an issue of importance to our industry as it will reduce the cost of doing business across the state. This law was sought as a remedy to the situation created as a result of a 2011 Georgia Supreme Court ruling that requires garnishment answers to be done by an attorney.

Credit unions and the Government Influence Team worked hard to move this legislation forward, speaking one-on-one with legislators and testifying in committee. Additionally, attendees of the Grassroots Academy reached out to their Senators and Representatives in person to ask for their support on the issue. Although the press has focused on the State Legislature’s slow movement in passing bills, we are delighted that this issue was one of the few that not only moved forward, but was signed into law at a rapid pace. Thanks to all the Grassroots attendees for reaching out to their legislators on this issue. Your involvement made a difference!

Credit union advocates who follow the lobbying efforts of GCUA on Twitter were aware earlier this week when the bill was signed into law. Follow GCUAGov on Twitter for up-to-the-moment activity.

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State Legislature Moving Forward Quickly

This week the State Legislature reached day 18 of the 40 day schedule, with no slowing of pace in sight. Although the “session clock” is ticking away quickly without many bills passing, there continues to be a flood of bills introduced, several of which are of industry interest. Some activity of note from the past few days:

  • On Monday, February 6th the Senate Banking Committee revisited the Foreclosure Registry Bill (HB 110) by Rep. Mike Jacobs (R-Atlanta). This bill would set uniform standards on how cities and counties could design foreclosure registries, and retains an exemption for financial institutions as an owner through foreclosure from registering and paying any associated registry filing fees, provided they file the deed within 60 days with the required contact information sent to the city and/or county.

    As reported in last week’s legislative update email, the debate among lobbyists and legislators continues to be not on the above language that applies to credit unions and other financial institutions, but on whether the bill should be expanded to include abandoned property registry limits, as well as a broader debate by some of the actual concept of a registry. Consensus is being sought presently between both the lobbyists for cities and counties (who have not been in favor of the current abandoned property piece of the bill) and lobbyists for the realtors (who are seeking the expanded abandoned property language). However, progress is being made: HB 110 passed out of committee on the 6th and moves to the Rules Committee for consideration on the Senate floor for a vote, but much work by the Government Influence Team continues and issues remain to be resolved on the above compromise between the lobbying interests. Stay tuned!
  • On Tuesday, February 7th the House Banking Committee met briefly to address Derivates Exposure Bill HB 886 by Rep. Bruce Williamson (R-Monroe) that would require derivatives exposure to be counted within a bank’s legal lending limits. This is being sought to allow some state-banks to continue to participate in derivatives in compliance with the federal Dodd-Frank Act. The banking industry in Georgia reached out to the Government Influence Team prior the session to share what they were seeking in this bill.

There are several bills that are anticipated, and new versions of old bills from 2011 that are likely to surface in the coming days. New bills of note to credit unions from this week:

  • The Department of Banking and Finance’s Housekeeping bills (HB 945 and HB 946) by Rep. Sam Teasley (R-Marietta) were introduced on Thursday, February 9th. The Department shared their proposal with GCUA prior to the start of the state session, and Grassroots Academy participants received an advance copy in January. There are no provisions in these bills that would impact credit unions.
  • Tax Expenditure Review Bill HB 920 by Rep. Chuck Martin (R-Alpharetta) was introduced on Monday, February 6th. This bill seeks to require a tax expenditure review on all foregone tax revenue of the last three years, and requires an analysis of who or what is receiving the benefit of the expenditure. This bill will be monitored closely.
  • Merchant Acquirer Limited Purpose Bank Act HB 898 by Rep. Earl Ehrhart (R-Powder Springs) was introduced on Monday, February 6th as well. The intent of this bill is to provide Georgia companies such as TYSYS the ability to maintain their own settlement accounts. Although it appears to be narrow in purpose and scope, it is currently being analyzed to ensure there is no indirect impact to credit unions.
  • Debt and Creditor Adjustment Bill HB 901 by Rep. Tom Weldon (R-Ringgold) was also introduced this week. This bill alters how debt adjustment companies operate in Georgia, and will be monitored closely.
  • And from a completely different perspective, this week also saw the introduction of an Ethics Reform Bill SB 391 by Sen. Josh McKoon (R-Columbus). Although ethics reform resonates positively in the press, any bill that impacts lobbyists is analyzed to ensure that the legislative efforts that are put forth on behalf of credit unions are not hindered.

The status of legislation changes quickly, and what are considered “dead” issues on one day can resurrect at any moment. To learn more about the daily activity on the above bills and others that are being monitored on behalf of credit unions, please access the Georgia credit union legislative tracking site.

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Opportunities to Build Influence
Left to Right: Senate Banking Chairman, Jack Murphy and Linda Murphy with Mike Mercer of GCUA.

Opportunities for credit unions to build influence with legislators are everywhere: Hike at Home and Hike the Hill events, seeking out legislators in the district at civic events, engaging in campaign activities, and inviting them to your credit union and/or to attend a Chapter meeting are just a few. The time spent on these activities by credit union advocates builds influence for all credit unions and is important. When legislators have a positive connection with our industry, they are much more amenable to the legislative needs of credit unions.

On Tuesday, February 7th credit union advocates had the opportunity to build influence and strengthen relationships with a wide variety of state leaders at the annual League-hosted legislative dinner held in conjunction with the February board meetings. The evening included a roster of individuals who have a direct impact on the bills that can impact credit unions:

Legislators are invited to multiple events almost every night during the session. However, many shared that the credit union event is one they never want to miss. While the evening serves as a way to get connected with legislators, the above individuals spent the evening with credit union leaders learning more about our industry, which is valuable. This event is a prime opportunity to build relationships with the elected officials who make decisions on issues that impact the ability to serve your membership.

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Credit Union's Attempts to Move MBL Legislation a Thorn to Bankers

Earlier this week a Capitol Hill newsletter, The National Journal Daily reported on the credit union’s push to gain additional traction in DC for the Member Business Legislation. The article, “Credit Unions’ Push Puts Banks in Tailspin,” details as the headline and quotes make clear that the banking lobby is angry and frustrated that their opposition to our member business lending legislation is preventing a regulatory relief bill they strongly support from going anywhere.  As CUNA’s John Magill states in the story, credit unions are more than willing to see their bill advance if the credit union MBL bill advances as well; our industry has no objection to regulatory relief. But if the banks are unwilling to consider a balanced approach and accept our MBL legislation, they will continue to be frustrated. 

That same point was made at a news conference on Capitol Hill, which also featured the MBL bill’s two chief House co-sponsors, Reps. Ed Royce (R-CA) and Carolyn McCarthy (D-NY). CUNA on behalf of all credit unions emphasized small businesses need more access to credit and the MBL bipartisan legislation will allow credit unions to help while creating more jobs in the process, at no taxpayer expense. The news conference also featured a number of small business people who are in Washington for a special small business Hike the Hill, plus members of the small business coalition who also emphasized in this economy small business need greater access to the kind of affordable credit that credit unions can and do provide. Click here to read the article.
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Georgia Part of Pilot Program: Renting Government-Owned Foreclosures

Atlanta's nearly 4,600 government-owned foreclosed properties is first in the nation, far outnumbering those in Phoenix, Las Vegas and other major metro areas hit hard by the housing bust, according to a report last month from the Federal Reserve. Statewide, Georgia has more than 6,400 of the homes, second only to California, with nearly 9,000. But the region now stands to be one of the biggest winners of a federal pilot program to turn the homes-nearly 84,000 total nationally-into rental housing.

The plan would allow investors to buy up pools of foreclosed homes to rent. The intended goal is to deplete the surplus of homes and ease pressures on deteriorating prices. Nationwide, declining home values have resulted in an estimated $7 trillion loss in household wealth for Americans-significantly dampening consumer spending. Disproportionately hit are those middle-class families as home equity accounts form a larger chunk of their overall wealth. To learn more, please click here for the February 5th Atlanta Journal Constitution article.
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Looking for Possible Seg Growth Opportunities?

New forecasts from the Bureau of Labor Statistics may provide clues about the fastest-growing fields this decade. Assuming a full-employment economy with an unemployment rate of 5.2% by 2020, the BLS expects total U.S. employment to rise 14.3% over the current decade, resulting in 20.5 million new jobs. The projections are based on expected labor force participation, the assumed unemployment rate and estimated housing starts, among other factors. But where is the growth projected?

  • Much of that growth - more than 2 million positions - will come from low-paid openings for home health aides (mean annual wages of $21,760) and personal care aides - people who look after the elderly and infirm but do not administer medications (mean annual wages of $20,420) and retail salespeople (mean annual wages $25,000).
  • Registered nursing, the occupation expected to add the most jobs (712,000),offers a bright spot, with mean annual wages of $67,720 in 2010.
  • Among the fastest-growing occupations - those adding jobs quickly though not necessarily in large numbers overall - are biomedical engineers (mean annual wages: $84,780), veterinary technicians (mean annual wages: $31,030), event planners (mean annual wages: $48,780), and physical therapy assistants (mean annual wages: $49,810), and occupational therapy assistants (mean annual wages: $51,300).
  • Some construction jobs such as glazing, brickwork and carpentry - for which mean annual wages range between $27,000-$50,000 - will also grow fast over the coming decade, but the agency said employment in the industry will not return to pre-recession levels by 2020.
What fields are projected to see a decline? The BLS forecasts that 11 industries in that sector will experience among the largest job declines over the next 10 years. Hardest hit will be apparel knitting mills and computer and electronics factories. To read the February 2nd Wall Street Journal article for more labor statistic details, please click here.
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Can You Hear Us Now - NCUA Cancels February Board Meeting

On February 9th, the National Credit Union Administration (NCUA) Board announced they will cancel the open meeting that had been scheduled for Feb. 16. In the release they mentioned that they understood that many credit union officials are feeling overwhelmed by a large number of proposed and final regulations, many of which are mandated by statute and issued by several different agencies.

As part of the President Obama’s Executive Order on Regulations and Independent Regulatory Agencies (E.O. 13579) and the Regulatory Modernization Initiative of Chairman Matz NCUA is carefully evaluating which NCUA rules need to be streamlined, eliminated or clarified in 2012.

NCUA may also cancel other Board meetings later in 2012 as they seek to minimize the number of new regulations that are necessary. Any further meeting cancellations would be announced in the month in which they would occur. To read the release click here.
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Congress to Address Supplemental Capital for Credit Unions
Rep. Peter King

On Thursday, February 9th, Representatives Pete King (R-NY) and Brad Sherman (D-CA) introduced legislation in the House that would permit NCUA to allow credit unions to accept additional forms of capital, provided it does not alter the cooperative ownership structure of credit unions. The bill, H.R. 3993, is titled the "Capital Access for Small Businesses and Jobs Act” and was introduced with Representatives Ron Paul (R-TX), Greg Meeks (D-NY), Larry Kissell (D-NC) and Bob Filner (D-CA) joining them as original cosponsors.

Current law restricts credit unions to building their capital levels through retained earnings. Under the newly introduced bill, supplemental capital would have to be uninsured and subordinate to other claims against a credit union.

In a letter to colleagues seeking support for the bill, King said it will provide the NCUA with "the same authority and flexibility to adjust capital requirements in response to changes in economic conditions as Congress has provided to federal banking regulators."  They said it also will:

  • Rectify a flaw in the 1998 law that is discouraging manageable asset growth by financially healthy credit unions;
  • Ensure credit unions can continue to accept new deposit shares - even during tough economic times when demand for loans and other income-generating services are low;
  • Allow credits unions to help keep private sector credit flowing at affordable rates even in recessionary times;
  • Provide the credit unions’ regulator, National Credit Union Administration (NCUA), with the same authority and flexibility to adjust capital requirements in response to changes in economic conditions as Congress has provided to federal banking regulators.

The NCUA has backed an idea to permit a combination of supplemental and risk-related capital for credit unions. All national trade groups within the credit union industry reached an agreement on the language and are working to secure a bipartisan group of cosponsors.

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"Landmark" Mortgage Fraud Settlement Announced

State and federal officials announced on Thursday, February 9th that they have arrived at an agreement on a $25 billion dollar settlement on foreclosure practices with five of the top banks in the country. The deal, the largest government industry settlement in more than a decade, aims to:

  • help troubled borrowers by reducing the amount they owe on mortgages,
  • lowering interest rates, and
  • paying restitution to home owners who suffered mortgage-related abuses.

This settlement will force these lenders to revamp how they interact with troubled homeowners, and will likely have a ripple effect across the industry. Please click here to read the Washington Post’s article to learn more.

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Your Talking Points

Each month, the GCUA Public Influence Team releases Consider This, an e-news brief sent to journalists across Georgia. The purpose of Consider This is to present compelling story topics to journalists who cover consumer finance. The hope is that journalists across the state will find interest in these topics and call on credit union representatives as expert sources on these issues.

Consider This is sent to credit union leaders via email prior to sending it to reporters. This email includes related talking points for your review. Click here to see the latest talking points for the February issue of Consider This, titled “How Much Does Your Tax Refund Cost You?”

We encourage you to utilize this e-news brief in the following ways:

  1. Forward the link to your local consumer or financial reporters (those with whom you already have a relationship) to determine if they have received it and are interested in writing a story about the topic. Ask if they would like to interview the CEO at your credit union.
  2. Contact your local reporters to discuss the topic and offer to provide the local angle from your credit union’s perspective. Please contact the GCUA Public Influence Team prior to participating in an interview.
  3. Develop your own news release to include statistics and information from Consider This, and send it to your local media.

Should a reporter contact you directly, please call Anita Paul prior to participating in an interview so additional information may be provided to ensure a consistent message delivery.

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CitiBank To Stop Originating Home Loans through Mortgage Brokers

The Wall Street Journal reported on February 3rd that CitiBank announced it will stop originating home loans through brokers. The move is a prime example of how the financial crisis is reshaping the mortgage industry. Like many banks, Citigroup Inc. had already reduced the number of mortgage brokers it was doing business with during the height of the mortgage meltdown in 2008. But unlike J.P. Morgan Chase & Co., Bank of America Corp. and other mortgage lenders, it hadn’t entirely cut off brokers. Banks have blamed brokers, who originated the majority of mortgages before the financial crisis, for badly underwritten loans and now want to be in full control of the underwriting process to reduce risk. Further, banks want to deal with customers directly, hoping they can turn mortgage borrowers into checking account and credit card customers.

Citi, one of the U.S.’s largest mortgage lenders, wants to focus on making mortgages through its own retail distribution network, including bank branches. Also, the bank will continue to make mortgage through correspondent banks, a business Bank of America has recently decided to exit. Citi will stop accepting mortgage applications at noon on February 8. Citi made $68 billion of mortgages last year; Wells Fargo & Co., the nation’s largest originator, made $362 billion; it continues to make brokered mortgages.

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