JULY 26, 2013
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Turning Up the Volume
A recent one-day Twitter campaign resulted in more than 5,000 "Don't Tax My Credit Union" messages to Congress. At least 120 people, representing more than 20 credit unions, took part in the event.

  Fighting the Dark Side Requires the Right Tools
Credit union advocates wanting to help spread the "Don't Tax My CU" message have a variety of tools at their disposal, including newletter articles, fliers and statement stuffers, e-mail messages and more.

  Royal Baby Fever? In D.C. It’s Tax Status Lobbying Frenzy
The prospect of tax reform has Washington lobbyists scrambling to defend their tax status, making it all the more important that credit union people make their voices heard in favor of keeping the credit union tax exemption intact.

  Winding Path of Housing Reform
The U.S. House Financial Services Committee gave its approval to a bill to overhaul the federal housing finance system, clearing the way for a vote by the full House of Representatives.

  Paying Employees Via Plastic? Senators Seek Inquiry
A group of 16 U.S. Senators called for the Consumer Financial Protection Bureau to investigate the growing use of prepaid debit cards to pay workers, citing concern over high fees associated with such cards.

  Seeking to Stop Overdraft Reordering
Ohio U.S. Sen. Sherrod Brown introduced legislation aimed at keeping financial institutions from reordering deposits and withdrawals in order to maximize overdraft fees charged to consumers.

  Separation of Church and State? How About Separation of Commercial and Investment Banking?
Four U.S. Senators introduced what they called the "21st Century Glass-Steagall Act," a bill that would restore barriers between commercial and investment banking that were lost when the Glass-Steagall Act was repealed.

  GA Senators Vote for CFPB Head Confirmation
Georgia's U.S. Senators, Johnny Isakson and Saxby Chambliss, were among the majority who voted to confirm Richard Cordray as head of the Consumer Financial Protection Bureau.

  One Step Closer for NCUA Nomination
The Senate Banking Committee approved the nomination of Richard Metsger to the board of the National Credit Union Administration, clearing the way for a confirmation vote by the full Senate.

  Building Relationships for Credit Unions
A meeting with state Rep. Micah Gravley gave a team from MembersFirst Credit Union the opportunity to share the credit union message with a legislator from their district.

  Georgia Analyzes the FairTax System
The state Senate began study committee meetings on Georgia's system of taxation, analyzing the feasibility of the FairTax system, although the prospect of tax reform before next year's elections is uncertain.

  Altering the Landscape
A judge's ruling moved Georgia's primary election date for federal elections from July to June, which could affect voter turnout and might also have implications for the U.S. Senate race.

  Definite Room to Grow: Americans Prefer
Banks Over Credit Unions

A recent poll on banking preferences found that respondents' first choice of financial institutions was community banks, followed by credit unions and finally by national banks.

  Hyland to Lead NCUF
Former NCUA Board member Gigi Hyland said she hopes to raise awareness of the National Credit Union Foundation and its potential when she assumes her new post as the foundation's executive director in August.

  Learn How to Tell Your Story
The Affiliates' Media and Communication Training, scheduled for September 16, will offer credit unions insight into the media landscape and help them develop effective ways to get their message across.

DialTurning Up the Volume

To date over 35,500 messages have been sent to Congress from people who care about their Georgia credit unions, and this does not even include all the contacts made via social media this past Tuesday in the nationwide Twitter-press of legislators! A highlight of the one-day Twitter campaign was when Rep. David Scott (D-13) responded to the #DontTaxMyCU tweets, expressing his support for the credit union tax exemption. He tweeted that “members own their not for profit credit unions and should not have an extra tax.” All in all there were at over 20 Georgia credit unions engaged in the Twitter campaign, with at least 120 people tweeting and retweeting that generated over 5,000 messages in one day!

Outside of the one-day Twitter campaign, Georgia credit unions continue to expand their involvement in the nationwide call to action. For a report (minus pending Twitter analysis) on Georgia activity please click here. Many of these credit unions are going directly to their membership to generate as many contacts as possible to Congress to support all credit unions. And getting membership involved could not be easier; for ideas below are two credit unions who are engaging their membership, and what works for them:

Habersham Federal Credit Union
Habersham FCU asked their members to get involved in the campaign asking Congress to Don’t Tax My Credit Union. CEO Lorie McGovern shared that the loss of the tax exemption status would change the fundamental nature of not just her credit union, but all credit unions and would compromise their ability to serve their members. McGovern stated that “as a small credit union in growth mode, the loss of our tax exemption status would have a significant impact on HFCU’s ability to continue to grow and serve our members in the manner that differentiates us from other financial institutions.” This would have a negative direct impact on providing the products and services that their members need at a cost they can afford. Once they asked their membership to get involved, they saw a marked response.

On their high member response, McGovern said “we’ve always taken pride in the fact that we know our members and that they’re like family. We try to keep open communication with them which enables us to have a better feel for what is important to them. And believe me, taxes are an important issue to most of our members, and more taxes in any form is NOT what they need. We want to ensure that HFCU continues to be able to meet the needs of our members and the communities we serve.”

How did they educate their team? McGovern shared that they had a solid foundation from which to work. They strive to educate staff, volunteers and members on an ongoing basis regarding the credit union structure and philosophy, which enables them to better understand the impact of any changes. So when proposals such as changing the tax exemption status came along, it was easy and didn’t “take a lot of prodding to get them motivated to act.”

How time consuming was it to get involved? McGovern shared that it did not take much effort at all: “I briefly discussed the issue with staff and the Board of Directors, and asked them to go to the link that was provided on our website for more information to take action.”

What’s the secret . . . how are you getting your members to respond? Much of Habersham FCU’s success can be traced to their regular contact with members and their efforts to educate them on what makes credit unions unique. For this campaign, “we simply put the provided banner and link on our website. We also sent an e-mail blast out to our members explaining the issue and its possible impact” said McGovern. They kept is straightforward, including the link to the “DontTaxMyCU” site, which made it easy for their members to take action. They also consistently repeat the message; they have mentioned the issue and provided the link several times on their Facebook page.

But what about the members – any negative response? “I’ve received no negative feedback to date. Actually, I’ve had several members e-mail or call me to say thanks for informing them of the issue and for forwarding the link for them to take action,” shared McGovern. “Our members are hardworking families that cannot afford additional taxes, and cannot afford to lose the benefits that credit unions provide.” We couldn’t agree more with the sentiment!

MidSouth Community Federal Credit Union
MidSouth Community FCU engaged their members in the Don’t Tax My CU campaign in a variety of methods, reinforcing their message with regular updates in different channels. CEO Roy Bibb has had multiple e-mail blasts to membership and social media posts, and the credit union has prominently placed the action alert on their web page. In addition, Bibb has taken the credit union message on the radio, with two radio guest segments with local media partners to heighten awareness and educate the public on the purpose and justification of the tax-exempt status of credit unions.

How did they educate their team? Bibb shared that rolling out the message internally to staff was all they needed to do to get their team aware and engaged. The staff also analyzes the rate of member response from their e-mail blasts, so they know firsthand the importance of generating volume on this critical issue.

What’s the secret . . . how are you getting your members to respond? Bibb credits the response rate of their membership with the fact that they have had “multiple marketing communications specifically targeted across multiple channels.” E-mail blasts, Twitter posts, anything they can do to keep the message in front of the membership in a variety of ways to promote awareness and involvement.

Taking the message on the radio is great! How did you make that happen? Bibb cites the positive existing relationships with area radio stations. Realizing the opportunity in connections helped them share the credit union message; Bibb shared that “the owner of the local station is a great credit union advocate” and it was a perfect window to encourage individuals to get involved in the call to action.

But what about the members – any negative response? “Not a bit,” says Bibb, which highlights their members’ commitment to the credit union. Statewide, the only negative response that GCUA has heard of is not in wanting to send a message, but rather where people may have challenges with accessing the call to action. If your credit union has a member experiencing this issue, please click here for a sample step-by-step instruction of how to complete the call to action.

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Dark sideFighting the Dark Side
Requires the Right Tools

Bankers have been calling on Congress, saying that it is time to end the credit union tax exemption. If you question how much they are pushing, read the letter from the president of the Georgia Bankers Association to Senator Isakson calling for the repeal of the credit union income tax exemption. Credit unions across the country are working hard to protect the tax status. This is not an effort to sit by and watch from the sidelines; engage today. Looking for ways to engage your credit union? There’s a wide variety of tools at your fingertips to fight the dark side:

  • Multiple stock newsletter articles on the credit union difference, the campaign, and how credit unions are focused on the member.
  • Sample social media posts that you can adapt for your Facebook and/or Twitter presence.
  • Fliers/Statement Stuffers.
  • Sample letters used by other credit unions in asking their membership to get engaged.
  • Sample postcards used by other credit unions to have members complete and send.
  • Sample e-mail messages to engage membership.

Want to access any of the above to help you in crafting your message to your membership? Click HERE for the Georgia Don’t Tax My CU Resource Page.

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Baby crowdRoyal Baby Fever? In D.C.
It’s Tax Status Lobbying Frenzy

While much of the world has “royal baby fever,” it is not the case in Washington, D.C., which has been a whirlwind of lobbying on tax statuses by different industries. The Hill newspaper on July 18th laid out the frenzy of lobbying activity happening on Capitol Hill as various groups, including credit unions, fight for their tax status. This piece demonstrates what has been heard over and over from CUNA – that credit unions need to tell elected officials to retain the credit union income tax exemption. As some of the insiders on Capitol Hill are saying, the blank-sheet approach should be a wake-up call for Main Street as much as for K Street (the street in D.C. where most lobbying firms have offices). Even if legislation does not pass this year, preliminary judgments are being made about corporate income tax exemptions – and the time to have input is now. It is obvious that the national campaign efforts of “Don’t Tax My Credit Union” are important and we must continue our push to get credit unions loyalists and credit union members engaged.

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Winding pathWinding Path of Housing Reform

On July 18th, the House Financial Services Committee held a hearing for the housing reform bill that Committee Chairman Jeb Hensarling (R-TX) and other panel leaders unveiled on July 11th. Their proposal would wind down Fannie Mae and Freddie Mac within five years, during which it would also increase guarantee fees and lower the GSEs’ conforming loan limits. In place of Fannie and Freddie, they would create a publicly accessible platform through which banks of all sizes could find private-sector buyers for mortgage securities. Hensarling's bill would narrow the Federal Housing Administration’s mission to serving first-time and low-to-middle-income homebuyers and increase its down payment requirements.

This bill, the Protecting American Taxpayers and Homeowners (PATH) Act of 2013 H.R. 2767 follows a bipartisan Senate bill that would replace Fannie and Freddie with a private market for securitizing mortgages and a new government agency as a backstop. On July 23rd, Bill Hampel, CUNA chief economist, testified before a Senate Banking subcommittee on this topic, addressing The Housing Finance Reform and Taxpayer Protection Act of 2013 S. 1217. Credit unions have told housing policy makers through Hike the Hill visits and letters to the Obama administration, and in earlier congressional testimony, that the needs of credit unions must be considered as the country moves forward on needed reforms.

On July 24th members of the House Financial Services Committee moved the housing reform issue forward by approving the PATH Act on a mainly party-line vote. The bill may now be considered by the full U.S. House. Of note to credit unions, the approved bill contains regulatory relief provisions strongly supported by the industry, including a provision to delay the mandatory implementation of all Dodd-Frank Act mortgage rules for an additional year.

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Sens. Richard Durbin, left, and Charles Schumer, center, are among those asking for the study
Paying Employees Via Plastic?
Senators Seek Inquiry

On July 11th The New York Times reported that 16 U.S. senators are asking regulators to examine the use of ATM-style cards to pay hourly employees; the concern is where some pay cards charge fees. In the letter, the senators urged Consumer Financial Protection Bureau Director Richard Cordray to take swift action to protect American workers. This is in response to a growing number of companies around the country that are doing away with direct deposit or paychecks, and going straight to prepaid cards (see the July 12th edition of Creating Influence for additional details).

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StopSeeking to Stop Overdraft Reordering

The CFPB’s attempts to deal with overdraft reordering gained a strong ally on July 24th when Sen. Sherrod Brown (D-OH), chair of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, introduced legislation that aims to prevent financial institutions from reordering account deposits and withdrawals to maximize the amount of overdraft fees that may be charged to accountholders. The legislation would grant the CFPB legal authority over the practice.

This bill comes at the heels of much focus in the press and regulatory world on overdraft programs; please see the July 12th edition of Creating Influence for details. On the issue, Brown shared that “banks should play by the rules instead of purposefully ‘reordering’ their consumers’ debit card transactions so that they profit while consumers rack up costly penalties. My bill would put a stop to this by empowering the CFPB to crack down on banks that employ predatory practices. It also would allow the CFPB to establish fair guidelines to protect consumers and the banks and credit unions that play fair with their customers.” According to the release from Brown’s office, the bill would limit overdraft strategies by requiring institutions to post transactions in “an objective way” that is clear to consumers, grant the CFPB the authority to monitor overdraft practices to determine if they are acting predatorily and establish guidelines that protect consumers. Brown’s bill would also direct the CFPB to provide a safe harbor from litigation for institutions that follow the bureau’s overdraft system. 

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SeparationSeparation of Church and State? How About
Separation of Commercial and Investment Banking?

On July 11th, Sens. Elizabeth Warren (D-MA), John McCain (R-AZ), Maria Cantwell (D-WA) and Angus King (I-ME), introduced what they called the “21st Century Glass-Steagall Act,” a bill that would reintroduce barriers between commercial and investment banking. The intention is to create a modern version of the Glass-Steagall legislation from the 1930s, which placed firm limits on what regulated banks could do. It was fully repealed in 1999, laying the groundwork for the mergers that created some of the biggest banks of today. If passed, it could force many of those banks to let go of their trading operations.

The bill would prohibit FDIC-insured depository institutions from engaging in insurance, securities or swaps activity, or from being affiliated with any such entity. It also would generally prohibit board members of insurance, securities and swaps entities from serving on FDIC-insured bank boards – basically, insured banks would be limited principally to holding deposits and lending. But what are the bill’s chances? Similarly stringent banking bills introduced in the last few years have struggled to gain sufficient votes in Congress, and this one may be no different. In addition, a move as radical as splitting up large banks is highly unlikely to gain the support of top regulators like the Federal Reserve or the Treasury Department.

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Isakson and Chambliss
U.S. Sens. Johnny Isakson, left, and Saxby Chambliss
GA Senators Vote for
CFPB Head Confirmation

On July 16th the Senate confirmed Richard Cordray to head the Consumer Financial Protection Bureau, ending years of contentious political wrangling over the leadership of what has become one of the most influential agencies in Washington. The 66 to 34 vote came hours after lawmakers averted a showdown over Senate rules governing whether the filibuster could be used to block presidential appointees. All 54 Democrats voted for confirmation while 12 Republicans voted in favor, including the two from Georgia. The 12 GOP senators were Saxby Chambliss (GA), Tom Coburn (OK), Susan Collins (ME), Bob Corker (TN), Jeff Flake (AZ), Lindsey Graham (SC), Orrin Hatch (UT), Johnny Isakson (GA), John McCain (AZ), Lisa Murkowski (AK), Rob Portman (OH) and Roger Wicker (MS). In spite of the vote, Senate Republicans say they will continue the fight for structural changes at the consumer bureau.

Cordray’s confirmation clears the way for the bureau to take more aggressive steps to police the financial services industry. In the past year, the agency issued a series of rules to govern mortgage lending and handed down enforcement actions against big banks, including U.S. Bank, for abusive lending practices. It will also be more difficult to challenge the agency’s efforts to regulate those industries.

Even with the vote, there are still lingering questions about the legality of Cordray’s actions during his recess appointment. Last month, the Supreme Court said it will decide whether the President exceeded his constitutional authority by making appointments while the Senate was on break. If the court rules against the appointment, financial firms could sue to invalidate the CFPB’s enforcement actions and rules during that period. However, it is doubtful if any attempt to undo the bureau’s actions in the past year would be successful. Cordray’s confirmation also means the CFPB will now have the full authority to police payday lenders, debt collectors and other nonbank firms. The 2010 Dodd-Frank financial reform law, which created the bureau, requires the CFPB to have a confirmed director to regulate that segment of the financial industry. To read more click here.

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StepsOne Step Closer for NCUA Nomination

On July 19th in a voice vote, the Senate Banking Committee cleared the nomination of Richard Metsger to the NCUA Board. The nomination will move forward to the full Senate floor for a confirmation vote. Although there is no definitive word yet on timing yet, Metsger's nomination is not considered to be controversial and could get a full Senate vote before the U.S. Congress breaks in August for its Summer District Work Session.

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Gravley HikeBuilding Relationships
for Credit Unions

On July 15th, MembersFirst CU spent a large part of their day with one of their district legislators State Rep. Micah Gravely (R-Douglasville). During the meeting, they shared what makes credit unions unique, how they are structured, how they collaborate with their fellow credit unions for the benefit of their members, and what legislative hot-topics impact our industry on a state and federal level. Their time and efforts generated a full plate of information on credit unions!

This type of targeted meeting grows credit union influence, and strengthens (or creates) relationships with elected leaders who can impact any credit union. Thank you to CEO Terry Hardy and his team; by taking the time to make a personal connection they put a positive face on the industry and provided vital information a legislator would need.

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Georgia CapitolGeorgia Analyzes the FairTax System

On July 17th the state Senate began its study committee meetings on the state tax system in Georgia, analyzing the feasibility of a FairTax system. From the initial meeting, the committee appears interested in pursuing proposals that broaden the tax base, whether that is a full “FairTax” system or a combination of lowered income tax and higher tax on goods and services. From a credit union perspective, any proposal will be monitored closely, especially one that may broaden the tax on services to include financial transactions – and this is outside of any discussion of the tax exemption! However, while the committee did discuss broadening the tax base, those service industries suggested in testimony to be taxed were housing, health care and groceries.

The road to any state tax reform is uncertain, and with 2014 being an election year it is unclear what if anything will pass. Regardless, this is an issue that will continue to arise on the state level; the study committee will continue to meet, and the Senate Finance Committee announced that they will have a special subcommittee in 2014 dedicated to state tax reform options. Stay tuned!

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Altering the landscapeAltering the Landscape

On July 11th a judge moved up Georgia’s primary date to June 3rd from its usual mid-July date, marking the end of a yearlong lawsuit against Georgia filed by the federal government. The Department of Justice had alleged Georgia was not allowing enough time for members of the military and others overseas to return absentee ballots in federal runoff elections. Under prior law, Georgia runoffs were slated for three weeks after the primary, where federal law requires military and overseas residents be given 45 days to return ballots. The changes only affect federal elections, and unless the state legislature changes the calendar for state elections, there will be separate state and federal primaries in Georgia. To some this might seem like a minor housekeeping adjustment, but it has the potential to leave a mark on the battle for the Senate.

Why does the prospect of an elongated runoff matter? Democrats heavily courted Michelle Nunn (daughter of Sen. Sam Nunn) to run. If she wins the primary outright, she would potentially have longer to prepare for the general election fight, while two Republicans are still fighting each other to win the Republican primary. Turnout is another variable for the race; historically July turnouts are typically very low. Moving the election up to June could mean more voters show up to the polls, which could help some of the more established GOP candidates. In the end the ruling may not be the last word in Georgia; the state could appeal, and the state legislature could also weigh in. Stay tuned!

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Definite Room to Grow: Americans Prefer Banks Over Credit Unions

GoBankingRates.com reported on July 17th that while credit unions may be gaining the attention and membership of Americans at a rapid pace, according to the newly released results of the American Banking Preference Poll, they are still a long way from becoming the average person’s primary financial institution.

JumpSince 2011, there has been a heightened awareness surrounding banking practices and fees, prompting many consumers to reevaluate their current relationships with financial institutions and make the move from a national institution to a community bank or credit union. They found that while credit unions are indeed popular, banks still hold a majority of consumers’ money. The American Banking Preference Poll asked respondents to identify which type of financial institution they prefer to bank with: national banks, community banks, or credit unions.

Overall, community banks were the top choice among poll respondents, with 41.2 percent stating they prefer local banks over national banks and credit unions. Credit unions came in second place, however, with 34.4 percent of votes; while national banks ranked third with 22.9 percent (1.5 percent chose “other”). Among a subset of poll outlets (GoBankingRates.com and partner sites), however, poll respondents overwhelmingly choose credit unions as their preferred institutions, with credit unions garnering 73.76%. This variance may likely be tied to the level of understanding of financial institutions; the preference for one type of institution over another may depend on how deeply a person is active within the personal finance community.

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HylandHyland to Lead NCUF

When she takes her new position August 26 as executive director of the National Credit Union Foundation, Gigi Hyland says she is eager to leverage her relationships in the financial services, philanthropic and policy arenas to raise awareness of the foundation, its reach and its great potential. She said it is the breadth and strength of those relationships that also will help her raise the resources necessary to fuel innovation and disseminate programs that work.

The foundation supports credit union shared values and unique philosophy of "people helping people," through such programs as REAL Solutions, Credit Union Development Education (DE), Biz Kid$, grants, and CUAid, for disaster relief. Through NCUF grants and programs, credit unions provide widespread financial education, create greater access to affordable financial services and empower more consumers to save, build assets, and own homes.

Prior to the new post, Hyland was most recently a member of the three-person NCUA Board. She served from 2005 until October 2012. Before the NCUA, Hyland was senior vice president and general counsel of Empire Corporate FCU, now Members United Corporate FCU.

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StoryLearn How to Tell Your Story

The Georgia Credit Union Affiliates will be hosting Media and Communications Training from 10 a.m. – 3 p.m. on Monday, Sept. 16, 2013, at the GCUA office. Lunch will be provided for this free event, which will feature insight into today's media landscape, equipping your front-line staff to deliver your main messages, developing effective spokespersons for your credit union, using social media and video to advance your communications objectives, mock interviews and more.

The lunchtime media panel is back by popular demand, 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.

Space is limited, so click here to register today.

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