NOVEMBER 30, 2012
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Driving Home the MBL Message
Representatives of 15 Georgia credit unions, along with two Georgia small-business owners, took part in this week's Hike the Hill event in Washington, D.C., to push for passage of member business lending legislation.

  Everything’s on the Table
As Congress and the White House negotiate to try to avoid the fiscal cliff, The Washington Post reported that popular tax deductions, including the one for home mortgage interest, may be among the "sacred cows" up for grabs.

  New Chair of U.S. Financial Services Committee
U.S. Rep. Jeb Hensarling, a Republican from Texas, will be the new chairman of the House Financial Services Committee, succeeding Rep. Spencer Bachus of Alabama.

  New Leadership Group at the Helm in Georgia
The leadership in the Georgia House and Senate will include several new faces when the General Assembly convenes on Jan. 14, giving credit unions an opportunity to forge new relationships in support of the industry.

  First Rabbit Out of the Hole: State Legislation Filed for 2013
The first bill filed for the state legislative session, by Rep. Wendell Willard, deals with reform of Georgia's civil forfeiture laws, which received a poor grade in a recent report by the Institute for Justice.

  The Time Is Near! Mayan Calendar? No –
Grassroots Academy!

Registration is under way for the 2013 Grassroots Academy on Jan. 29. The annual event is an opportunity for credit union advocates to learn more about the legislative process and promote the credit union message with legislators.

  Growing Influence: CFPB Taking CU Concerns to Heart
Consumer Financial Protection Bureau Director Richard Cordray notified CUNA that his agency, as a result of credit union efforts, is proposing changes in the final rule on international remittance transfers.

  Mortgage Ad Violations Prompts Investigations
The CFPB and the Federal Trade Commission warned some mortgage lenders and brokers that some of their marketing practices, including many ads targeting older Americans and veterans, may be illegal.

  Improper Fees? Settlement Reached
in Veterans Mortgage Case

The Atlanta Journal-Constitution reported that the federal government has reached a multimillion-dollar settlement with SunTrust Banks and five other major lenders over alleged improper fees for home refinance loans for veterans.

  Survey Says Go to a CU or Small Bank
A survey by the U.S. Public Interest Group found that free checking is more readily available at credit unions and small banks than at large banks, and that CUs are more responsive and more accurate than banks in disclosing their fees.

Driving Home the MBL Message
Hike the Hill November 2012
From left: Kelly Garmon, Georgia’s Own CU; Denise Swan, GEMC FCU; Jason Halperin, Georgia United CU; Chuck Head, Atlanta Postal CU; Todd Marksberry, Delta Community CU; U.S. Rep. Tom Price; Keith Pritchard, United Methodist Connectional FCU; Marshall Boutwell, Gwinnett FCU; Cindy Connelly, GCUA

This week more than 500 credit union advocates from almost every state descended on Capitol Hill to urge Congress to move forward the credit union member business lending (MBL) bills S. 2231/H.R. 1418 to incrementally increase the MBL cap. This legislation has been identified by Senate Leader Harry Reid (D-NV) as one of the many bills to tackle before the close of 2012 in the lame-duck session, and more than 20 Georgia credit union advocates and small-business owners joined the nationwide credit union efforts to move this issue closer to the finish line. Our thanks to Atlanta Postal CU, CORE CU, CDC FCU, Coosa Valley FCU, Delta Community CU, DOCO CU, GEMC FCU, Georgia United CU, Georgia’s Own CU, Gwinnett FCU, Marshland Community FCU, MidSouth Community FCU, Platinum FCU, TIC FCU, and United Methodist Connectional FCU for traveling to D.C. to sit down one-on-one with Georgia’s Congressional delegation to drive home the importance of the issue.

A special thank you to the two small-business owners, Tim Hunt and Ibrahim Jivani, who traveled with the Georgia group. Both shared with legislators their need for access to credit after the banks they had their small-business loans with called their loans due because of a reduction in commercial lending. They were excellent spokesmen on the benefits of credit unions, expressing that after they moved their loans, they also experienced the additional benefit of monetary savings through lower interest and fees charged for the loans at their credit unions.

You can help make a difference. Reinforce the message shared by your fellow Georgia credit union advocates today. Engage ALL of your credit union team in sending Congress the message that credit unions support raising the MBL cap. Click here to access the Legislative Action Center and send a message of support today.

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Everything’s on the Table

The Washington Post reported on November 28th that deductions once considered “untouchable” to Congress are on the table subject to change in the fiscal cliff discussions. The article highlighted that of all the deductions woven into the sprawling U.S. tax code, few have been more fiercely guarded than the tax break that lets homeowners deduct the interest they pay on their mortgages. But as Congress and the White House negotiate the first major rewrite of tax laws in decades, changing the generations-old mortgage-interest deduction has gone from a far-off possibility to part of the conversation. The outcome of that debate could have profound long-term effects on homeowners across the country.

TableAs the Obama administration and lawmakers on Capitol Hill scramble to defuse automatic spending cuts and tax increases set to take effect Jan. 1, a herd of “sacred cows” — from Social Security and Medicare to deductions for charitable giving and mortgage interest — are in danger of losing their untouchable status. Members of both parties have largely steered clear of detailed proposals so far, but top Congressional Republicans have expressed openness to limiting total tax deductions as part of an overall budget deal. In addition, the presidentially appointed Simpson-Bowles fiscal commission suggested scaling back the mortgage-interest deduction as part of its own set of tax-related proposals. These discussions are being monitored closely to protect credit unions. Stay tuned!

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U.S. Rep. Jeb Hensarling
New Chair of U.S. Financial Services Committee

U.S. Rep. Jeb Hensarling (R-TX) will serve as House Financial Services Committee chairman when the 113th U.S. Congress convenes next year. Hensarling was nominated by the House Republican Steering Committee on November 27th, and was approved by the House Republican Conference on the 28th. He will replace outgoing Chairman Rep. Spencer Bachus (R-AL), who must move from the financial services leadership position due to term limits. Hensarling has said that his two priorities as chair of the committee will be addressing "too big to fail" and regulatory burdens.

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Georgia CapitolNew Leadership Group
at the Helm in Georgia

The state legislative session will begin on January 14th, and when they convene there will be several individuals in new leadership positions in both the Senate and the House. The 2013-2014 session brings the first woman to head the Senate Democratic caucus in Georgia, new faces in the Senate Republican Caucus, and a changing of the guard for the House Minority Caucus. Out of all the change, the House Republicans have the only leadership group that remains status quo.

What does this mean for credit unions? The below leadership groups set the tone and can drive (or extinguish) legislative initiatives. They set the path for the state session, and have a large impact on which bills move forward. It is key for these leadership individuals to have not just an understanding of credit unions, but a relationship with their local credit union people at home in the district. If one of the below is your legislator, take the time to send a note of congratulations and start building a relationship today if you have not done so already.

Senate Leadership

House Leadership

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First Rabbit Out of the Hole: State Legislation Filed for 2013

State Representative Wendell Willard (R-Sandy Springs), the Chair of the House Judiciary Committee, introduced the first bill for 2013, which is legislation to reform Georgia’s civil forfeiture laws. The GA Uniform Civil Forfeiture Procedure Act (UCFPA) HB 1 seeks to modify the power of law enforcement to seize cash, cars, home and other property on the suspicion the property was involved in criminal activity. “Civil forfeiture laws represent one of the most serious assaults on private property rights in the nation today,” said Rep. Willard. “This bill will protect due process, transparency and create better accountability.”

RabbitIn a recent report by the Institute for Justice, Georgia was given a “D-” for its civil forfeiture laws and practices, with only four other state receiving similar low grades. In response, Rep. Willard introduced this legislation to clarify and streamline Georgia’s forfeiture process by standardizing the state’s forfeiture provisions and consolidating its forfeiture laws into one primary code section. The UCFPA, if approved by the General Assembly, will be located in Chapter 16 of Title 9, Civil Practice. The UCFPA is taken from the drug forfeiture statute that has guided the vast majority of forfeitures in this state for the last 20 years. However, the new UCFPA is divided into separate code sections to make it easier to read and understand. From a credit union perspective, Rep. Willard has already taken steps to ensure that credit unions are not disadvantaged. However, this legislation will likely go through multiple revisions during hearings in the state session and will be monitored closely to ensure that current lending and operation procedures are not impacted. To see this bill and others of industry note as they are introduced please click here for the Georgia credit union legislative tracking site.

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The Time Is Near! Mayan Calendar? No – Grassroots Academy!

Mayan calendarRegistration is under way for the 2013 Grassroots Academy. Have you secured your place yet? This event comes around once a year, and 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 of those that shape the bills that can impact our industry. Slated to share their insight with Academy attendees are:

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 the firsthand commitment of Georgia credit unions to “help consumers afford life.” Be there on Tuesday, January 29th at the 2013 Grassroots Academy. Click here for details and to secure your spot today.

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Growing Influence: CFPB Taking CU Concerns to Heart

CordrayConsumer Financial Protection Bureau (CFPB) Director Richard Cordray shared advance notice with CUNA on November 27th that the agency, as a result of credit union efforts, is proposing some changes to improve the final rule on international remittance transfers. The CFPB expects to issue a new proposal next month to provide additional flexibility regarding three elements of its final rule:

  • errors resulting from incorrect account numbers provided by consumers;
  • disclosure of certain foreign taxes and third-party fees; and
  • disclosure of regional and local taxes.

All of these are issues that were problematic to credit unions, and these adjustments are a welcome development. The CFPB will extend the effective date of the final rule until 90 days after the agency finalizes the new proposal; the proposed effective date is expected sometime during the spring of 2013. The agency is not planning at this point to increase the exemption level of no more than 100 transfers per year. However, efforts continue on behalf of credit unions to pursue it with the agency and with other policymakers

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Mortgage Ad Violations Prompts Investigations

FraudThe Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) have joined to warn about 12 mortgage lenders and mortgage brokers that some of their marketing practices may be illegal. The CFPB and FTC said consumer complaints in some cases drove them to examine more than 800 randomly selected mortgage-related ads. The ads were scrutinized for potential violations of the 2011 Mortgage Acts and Practices Advertising Rule. Ads examined included online ads, print ads and direct mail solicitations. They promoted mortgage loans, refinancing and reverse mortgages. 

The CFPB mainly focused on mortgage advertisements, and the FTC examined ads from Realtors, builders and lead generators. The CFPB is also investigating six companies for potentially serious violations. The agencies urged the lenders and brokers to review all their advertising for potential violations. Many of the advertisements in question are tied to products marketed to older Americans and military veterans. According to the CFPB, potential violations include:

  • Inaccurate or dishonest interest rate information;
  • Misleading information on reverse-mortgage costs; and
  • Misrepresentations regarding the amount of cash or credit that will be made available to reverse-mortgage participants.
  • The CFPB also cited instances in which reverse-mortgage lenders promised borrowers they would be able to stay in their homes payment free. The CFPB noted that reverse-mortgage borrowers are normally required to continue paying for taxes and insurance, and will most likely lose their homes if they do not.
The use of official-looking seals or logos that imply some kind of government connection is also a prohibited practice, the CFPB said.
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Improper Fees? Settlement Reached in Veterans Mortgage Case

Money houseOn November 19th The Atlanta Journal-Constitution reported that the mortgage division of Atlanta-based SunTrust Banks and five other major lenders have agreed to pay $162 million to settle a case alleging improper fees on home refinance loans for veterans. Moreover, because the improper loans were government-backed, taxpayers were on the hook for loans that defaulted, according to the lawsuit. The lawsuit was filed in 2006 on behalf of the federal government.

The plaintiffs contend former service members with existing VA loans were overcharged closing costs under a program allowing them to refinance so they could take advantage of low interest rates.

Imposing allegedly improper fees would have violated terms that awarded the lenders government guarantees. When loans defaulted, lenders turned to the government to recoup some of their losses for loans that were improperly made, said Jim Butler, a Columbus-based attorney for the plaintiffs. An interesting note is that the U.S. Justice Department can intervene to take over such a case, but has not in this one.

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Survey Says Go to a CU or Small Bank

SurveyFree checking is alive and well among credit unions and small banks, but not so at large banks with more than $10 billion in deposits. Only one-fourth of the big banks offer it, according to a new survey from the U.S. Public Interest Research Group (U.S.PIRG). For its 2012 survey report, "Big Banks Bigger Fees: A National Survey of Fees and Disclosure Compliance," PIRG staff visited 250 bank branches and 116 credit union branches in 17 states and the District of Columbia to determine if compliance with the Truth in Savings Act requirement that "prospective customers" have the right to "complete" schedules. Fewer than half the banks (48%) complied easily with the request. After two or more requests, eventually a total of 72% complied with the law. Credit unions had the highest percentage with complying with fee disclosure requests on the first request — 64 percent compared with all bank branches' 48 percent — and on the second, successive requests, if needed. They also gave the least partial or wrong information: 6 percent compared with 16 percent at all banks combined.
Researchers found a variety of free or low-cost checking options, with 60 percent of credit unions providing totally free checking. That compares with 24 percent for big banks and 63 percent for small banks. In a survey of just the banks (credit union data will be the subject of a separate report), small banks had lower average checking account fees, overdraft fees and foreign ATM fees and lower minimum required balances to avoid the fees. U.S. PIRG said it was surprised to learn that one-fourth of small banks no longer charge regular checking account customers the foreign ATM fees. This undercuts one of the major benefits often cited by large banks – access to large, no-cost ATM networks. Other findings:

  • Free checking remains widely available at small banks and credit unions. While the biggest banks are raising fees and eliminating free checking, most continue to offer free checking with direct deposit.
  • Free accounts are widely available at credit unions and small and regional banks, a finding that has been obtained by others, the survey noted.
  • The report did note that some credit unions could explain the basic terms better in their disclosures but that they generally had "fewer and lower fees than banks."

In detailed tips to consumers, the report listed as number one: "Choose to bank at a credit union instead of a bank."

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