SEPTEMBER 7, 2012
Facebook logo Twitter logo
Government Influence
Project Zip Code
Contact Your Legislator
State Legislative Update
State Legislative Grid
Federal Legislative Grid
 
Public Influence
Consider This®
CUs in the News
Maximize the Power of the Media
Paying ATTENTION®
Semi-Annual Member Benefits Index
Statewide News Coverage
 
Bernanke Bernanke Hints at Additional
Monetary Easing

Federal Reserve Chairman Ben Bernanke said he is not satisfied with current economic conditions and said the Fed would take additional action to improve the economy if needed.

 
     
  Raining Down the MBL Message on D.C.
CUNA scheduled for September 12 a press event in Washington, D.C., to emphasize to congressional staffers the importance of member business lending legislation.

 
  Apples to Apples: How Does Your Credit Union Compare?
A recent report analyzing CUNA data for July found that earnings and loan balances were higher compared with the same month a year ago, and those trends were expected to continue.

 
  CFPB Seeking Possible Changes: Definition of Finance Charge
The Consumer Financial Protection Bureau extended until November 6 the comment period for its proposed changes to the definition of "finance charge" as it relates to mortgage loans; the period was to have ended September 7.

 
  Your Golden Ticket to a Successful Legislator Meeting
Connecting with a legislator to promote the credit union message may seem intimidating, but keeping in mind a few key points can help you make the most of a meeting.

 
  Around the Corner: Grassroots Academy
The 2013 Grassroots Academy, scheduled for January 29, is an opportunity to get together with fellow credit union advocates and hear firsthand from legislators what to expect in the upcoming General Assembly session.

 
  Card Companies are Fishing – And a Little Education
Can Go a Long Way

Some credit card companies are offering what look like attractive deals to new customers, but credit unions can take advantage of the chance to educate their members on the potential pitfalls of these deals.

 
  Rulings a Blow to FDIC Lawsuits
A newspaper report said recent court rulings will make it more difficult for federal regulators to collect from former officers or directors of failed banks in order to recoup losses from those failures.

 
  And We’re Off to the Races: Banking Outlook
A recent report from Moody's Investors Service said the outlook for the U.S. banking industry remains negative due to the weak economy, continued low interest rates, fiscal uncertainty and other factors.

 
  CFPB Issues Exam Procedures for Credit Bureaus
The Consumer Financial Protection Bureau, soon to be responsible for overseeing large consumer reporting companies, revealed the procedures it will use in examining such companies, including credit bureaus.

 
  Last Chance to Register for Media Relations Training
There's still time to register for GCUA's 2012 Media Relations Training, scheduled for Thursday, September 13, but space is limited, so register now to reserve a spot at this informative event.

 
 
 
Bernanke Hints at Additional Monetary Easing

On August 31st, Federal Reserve Chairman Ben Bernanke expressed dissatisfaction with current economic conditions – particularly the unemployment rate – and reiterated that the Fed would take additional accommodative actions if needed. “In light of the policy actions the FOMC has taken to date, as well as the economy's natural recovery mechanisms, we might have hoped for greater progress by now in returning to maximum employment,” Bernanke said.

He identified a number of headwinds that are restraining economic growth: lackluster housing activity, fiscal challenges at the federal, state and local levels, and stresses in credit and financial markets, particularly uncertainty about developments in Europe. He did not specify details or indicate when the Fed would provide the additional accommodative actions to counteract the negative impact of the headwinds.

One possible hint is that Bernanke said the nontraditional policy tools that the Fed has deployed since the financial crisis have been effective, and that the costs “appear manageable,” suggesting further use of such tools would be appropriate if conditions warrant. “Over the past five years, the Federal Reserve has acted to support economic growth and foster job creation, and it is important to achieve further progress, particularly in the labor market,” Bernanke concluded. “Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.” Read the speech.

Back to top

U.S. CapitolRaining Down the MBL Message on D.C.

At 1:30 p.m. on Wednesday, September 12, CUNA will sponsor a press event in Washington focusing on credit union member business lending that will feature key Senate and House supporters of the Credit Union Small Business Jobs legislation (S. 509/H.R. 1418), as well as the small business coalition partners — all designed to highlight the importance of the business lending legislation to congressional staff. This event is in partnership with The Hill, a newspaper covering Congress and the Capitol Hill community.

As part of The Hill’s “Issue Forum” series, representatives of the newspaper will moderate the presentations about the legislation. This event will be available to the public via Internet video stream, and The Hill will be live-streaming the event to all Senate and House offices. Sens. Mark Udall (D-Colo.) and Susan Collins (R-Maine), as well as Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.), are anticipated to speak in support of the credit union business lending bills.

Further, Rhett Buttle of The Small Business Majority and Eli Lehrer of the R Street Institute — both respected leaders of their respective Washington think-tanks — will present a joint research report focusing on job growth, the role small business plays in the economy and the support that credit unions can offer to small business in the economy’s recovery with expanded business lending authority. Timing is opportune, as the joint research report will serve as the centerpiece of the presentation and will come just days after the government’s latest jobs report.

Back to top

Apples to Apples: How Does Your Credit Union Compare?

ApplesCredit unions nationwide collectively saw their earnings and loan balances rise in July, and those trends should continue this year, according to an economist's analysis of CUNA's monthly sample of credit unions for July. A few of the points:

  • Capital-to-asset ratio jumped to 10.3% in July from 10.1% in June due to capital growing much faster than assets
  • Capital levels rose over 1% in July from stronger earnings, while assets fell 0.7%
  • In July, credit union annualized return on assets came in strong at 1.28%, up from 0.82% for the first seven months of the year
  • Earnings keep rising as provisions for loan losses keep falling

The total dollar amount of capital for credit unions is $105 billion. In regard to the lending environment, credit unions saw:

  • Credit union loans outstanding grew 0.4% in July 2012, the same as June
  • Credit union loans totaled $597.8 billion in July, compared with $579 billion in July 2011
  • Unsecured personal loans led loan growth with a 1.2% increase followed by new-auto loans (1%)
  • Adjustable-rate mortgages and used-auto loans, which each rose 0.9%
  • Credit card loans grew 0.7%
  • Home-equity loans and fixed-rate mortgages declined 0.3% and 0.5%, respectively

Credit quality has improved significantly over the last year, with credit union delinquent loans-to-total-loans ratio came in at 1.29% in July, down from 1.59% in July 2011. This ratio is expected to fall further as the economy recovers and loan growth picks up. Credit union loan balances are anticipated to grow 3% in 2012 and 5% in 2013. Regarding liquidity, credit union loan-to-savings ratio increased slightly in July to 68% from 67% in June. Credit union savings in July totaled $880.7 billion, or $50 billion more than the $830.7 billion in July 2011. Of note:

  • Credit union savings balances fell 0.9% in July, compared with a 0.8% increase in June
  • Money market accounts led savings growth with a 1% gain
  • On the decline were one-year certificates (-0.2%)
  • Individual retirement accounts fell 0.4%
  • Regular shares fell 0.7%
  • Share drafts fell 6.4%
Back to top

CFPB Seeking Possible Changes: Definition of Finance Charge

The comment period for potential changes to the CFPB definition of "finance charge" as it relates to mortgage loans and the agency's high-cost mortgage coverage test under the Home Owners Equity Protection Act has been extended until November 6. The agency was scheduled to end the comment period for these proposed changes on September 7.

CFPB logoUnder the CFPB's finance charge proposal, lenders would be required to include most up-front costs associated with a mortgage in the finance charge disclosed to borrowers. Loan charges or fees would need to be included in the finance charge, but late fees, delinquency or default charges, seller's points, some escrow payments and most insurance premiums would not need to be included. The CFPB said it wants the APR "to be a more accurate reflection of the overall cost of credit."

CUNA in a July comment call asked credit unions which fees should be removed from or added into the proposed finance charge structure, and whether the proposed changes to the finance charge structure would create financial or compliance burdens for credit unions. The CFPB's high-cost mortgage rulemaking would alter the coverage test for high-cost mortgages to account for the higher APRs that could be caused by the finance definition changes. Both of these proposed changes are part of the CFPB's ongoing mortgage reform efforts, which include a project that would combine Truth in Lending Act and Real Estate Settlement Procedures Act disclosures into a single document.

Back to top

Golden ticketYour Golden Ticket to a Successful Legislator Meeting

Whether you are traveling to D.C. later this month for Hike the Hill, are participating in a local Hike at Home meeting throughout the year, or happen to run into a legislator on the campaign trail leading up to the November elections, it is important to make the connection for your credit union and ALL credit unions. Why? From a legislator’s perspective, understanding how issues can impact credit unions is POWERFUL when they make the connection that someone back home in their district is a credit union person.

Quite simply, when you make that connection you put a face on the industry to the legislator. However, sometimes the things that can be the easiest appear to be the most challenging. Connecting with a legislator is often a daunting task to individuals, but it could not be easier. Here are five quick and easy steps on how to make the most of a short meeting with an elected official.

  1. When you introduce yourself, share where you work and who your credit union serves.
  2. Communicate how your credit union makes a difference in the district in terms that resonate: how many people obtain homes, are able to afford cars, etc.
  3. Share how the credit union legislative issues impact the individuals in their district.
  4. Ask the legislator what is important to them. A simple, “What are your priorities in the legislative session?” gives them the opportunity to share what they want to see legislatively, which can provide valuable insight.
  5. Be sure to thank them for their time serving in office. The political climate over the past few years has been a challenge for any legislator – Republicans or Democrats, freshmen or longtime veterans. A thank you today can go a long way in opening doors for credit union issues in the future.
Back to top

Gold DomeAround the Corner: Grassroots Academy

Mark your calendars now for Tuesday, January 29th to attend the 2013 Grassroots Academy. The Grassroots Academy is an opportunity for credit union attendees to gather with peers to hear firsthand from state leaders on what to anticipate during the Georgia General Assembly. During the day, attendees will gain insight on the legislative agendas of the two parties and hear the insider’s perspective from those who shape the bills that can impact our industry. Each year it is unique! Don’t miss the chance to be in the know on the issues impacting credit unions, learn how credit union leaders can influence the future, and let legislators see firsthand the commitment of Georgia credit unions to “help consumers afford life.” Make plans to attend the 2013 Grassroots Academy. Watch for details in December at www.gcua.org.

Back to top

Card Companies are Fishing – And a Little Education Can Go a Long Way

FishingOffer credit cards to your membership? Now may be a perfect time to educate them on the value of their credit union credit card, as many credit card companies are now offering cards with teaser rates.

The September 2nd edition of The Wall Street Journal reported that some 40% of the nation's largest credit card issuers are offering some form of a 0% interest deals to new cardholders, according to a July survey by CreditCards.com, a Bankrate.com website. A handful of these are promoting the no-interest card with no annual fee, and cash-back rewards of $100. Others are offering airline miles or triple points on gas, groceries and drugstore purchases.

Although these offers may be attractive to consumers, there are a few things to be aware of. If a cardholder is late or misses a payment — or if the overall credit quality goes down during the introductory period — the increase in rates can be anywhere from 10% to 25% when applied retroactively to the balance. The number of individuals receiving 0% deals is increasing to include more people with FICO scores between 621 to 699, according to Ipsos Loyalty, a consumer research company. Those in the prime and super-prime range have scores of 700 to 759.

Back to top

GlovesRulings a Blow to FDIC Lawsuits

The September 4th edition of The Atlanta Journal-Constitution reported that recent court rulings will make it more difficult for federal regulators to collect losses from former directors or officers of failed banks, including the Chairman of the Senate Banking Committee State Sen. Jack Murphy. Murphy and other directors and executives of Integrity Bank of Alpharetta cannot be held responsible for all of its losses because the FDIC took over the bank’s loans and sold them, U.S. Judge Steve C. Jones ruled. The insiders can still be held responsible for some of the losses, which could be determined in by trial or mediation. Integrity failed in August 2008.

The FDIC sued the bank’s insiders, including Murphy, in 2011 in a bid to recoup losses from deposit insurance. It was the first such suit filed in Georgia by the FDIC, which has since filed seven others. In a second Georgia case, Jones affirmed an earlier decision August 14 to dismiss some of the FDIC’s claims against insiders at Haven Trust Bank, of Duluth. Georgia business law affords protections from claims of negligence against bank officers and directors, Jones ruled, and to win its case the FDIC will have to prove gross negligence, which is a higher standard. The FDIC is appealing that decision to the 11th U.S. Circuit Court of Appeals. Georgia leads the nation with 83 bank failures since mid-2008. Eight of the 32 suits against directors and officers filed by the FDIC during the banking crisis involve Georgia institutions.

Back to top

And We’re Off to the Races: Banking Outlook

PigsThe forecast for the U.S. banking system remains negative, and economic challenges are expected to continue to pressure banks over the next 12 to 18 months, Moody's Investors Service said in a report released on September 4th. "Our negative outlook for the U.S. banking system reflects a challenging domestic operating environment, with prolonged low interest rates, high unemployment, weak economic growth and fiscal policy uncertainties," said Moody’s SVP Sean Jones. "Additionally, the threat of contagion stemming from the European sovereign debt crisis undermines economic recovery in the U.S. and exposes banks to a heightened risk of shocks."

The report noted that Moody's rating outlooks on most U.S. banks have changed from negative to stable in the past two and a half years, thanks in part to banks’ larger capital and liquidity buffers. “But U.S. banks remain in recovery mode, which is prone to reversal if the economy takes a turn for the worse,” according to a Moody’s press release.“Nonperforming asset levels are still high, and legacy issues from the financial crisis will take years to resolve, with the latter ranging from the rundown of 'non-core' assets to litigation issues and mortgage repurchase demands.” Click here to see the release.

Back to top

FaceCFPB Issues Exam Procedures for Credit Bureaus

Have you ever wondered what the Consumer Financial Protection Bureau (CFPB) expects of others? Now is your chance to take a look. In the past, consumer reporting agencies had to comply with federal laws like the Fair Credit Reporting Act. But they were never subject to ongoing supervision. However, with the passage of the Dodd-Frank Wall Street Reform law, CFPB was designated as the regulator of larger consumer reporting companies.

The CFPB said examiners will assess the accuracy of credit reports and how companies disclose information to consumers about credit scores. On September 5th, the CFPB released the procedures it will use in examining credit bureaus and other consumer reporting companies. The agency’s authority to supervise consumer reporting companies takes effect September 30.

“Consumer reporting, and especially credit reporting, plays a significant role in a consumer’s life. It can dictate whether or not a consumer is able to get a credit card, a mortgage or a student loan,” said CFPB Director Richard Cordray. “Our supervision program will benefit hundreds of millions of consumers by making sure these companies are playing fairly and by the rules, and our field guide will ensure that all companies are held to the same standards.” Review the exam procedures.

Back to top

Last Chance to Register for Media Relations Training

Media Relations TrainingWhat can you do to get your local media to help tell the story of your credit union's good deeds? How can you position your credit union's spokesperson as a thought leader?

These and other questions will be answered at the 2012 GCUA Media Relations Training.

Thursday, September 13th
10a.m. - 3p.m. (lunch included)
6705 Sugarloaf Parkway
Duluth, GA
Cost: FREE

You don’t want to miss the insightful panels lined up for you:

  • Using Social Media in PR
  • Developing Member Spokespersons
  • How to Approach Legislators With Your CU’s Message

Hear from your credit union colleagues about best practices, dos and don’ts for developing effective, results-focused media and communications strategies. And watch live mock interviews to help perfect your interviewing skills.

Back by popular demand: Lunchtime Media Panel featuring journalists from print and broadcast media who will share insight into the daily workings of a newsroom, what reporters and producers look for in a good story, how and when to pitch them, and what their pet peeves are.

Click here to register. Space is limited, so register today.

Back to top