AUGUST 9, 2013
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Rolling Out Your Plan
to Protect Your Members

Need ideas for engaging your credit union's staff and membership in the campaign to save the credit union income tax exemption? Look to the example of one credit union that's taking a multi-faceted approach.

  Metsger Sails Past Senate to Join NCUA Board
The U.S. Senate unanimously approved the nomination of Richard Metsger to the NCUA Board, clearing the way for Metsger to join the other two board members once he has been sworn in.

  Student Loan Fix Clears Congress
The U.S. House passed a bill to restore the 3.4 percent interest rate on federal student loans; the measure will take effect once President Barack Obama signs it into law.

  Growing Support for Credit Unions
The National Cooperative Business Association sent letters to members of the House Ways and Means Committee and the Senate Finance Committtee, urging them to advocate keeping the federal income tax exemption for credit unions.

  Why It Takes All of Us
All of Georgia's federal legislators have been contacted in regard to the Don't Tax My Credit Union campaign, but the number of contacts per lawmaker varies widely,showing the need for more extensive credit union involvement.

  Housing Finance Reform Picking Up Steam
The New York Times reported that the idea of "winding down" government-sponsored housing finance agencies Fannie Mae and Freddie Mac is gaining momentum now that the housing market is recovering from its crash.

  Bankers Attack Credit Unions
The American Bankers Association held a webinar to roll out "ItsTime2Pay," its latest campaign to get Congress to repeal the credit union income tax exemption, which the association called "corporate welfare."

  Hiking in North Georgia
Representatives of four North Georgia credit unions promoted the credit union message in a Hike at Home meeting with State Sen. Jeff Mullis of Chickamauga, chairman of the Senate Rules Committee.

  Not Angry Birds... Advocacy!
CUNA's smartphone app, called CUNA Advocacy, provides valuable resources, including talking points, videos, legislative directories and more, to help advocates convey the credit union message.

  August Provides Opportunity to Connect at Home
Congress' annual August recess represents an important opportunity for credit union people to meet with their legislators close to home and make sure they're aware of the importance of "Don't Tax My Credit Union."

  Court Rejects Fed Interchange Cap Rule
A U.S. District Court judge in Washington, D.C., struck down the Federal Reserve's cap on debit interchange fees, ruling that the Fed did not follow Congressional intent when it implemented the cap and other measures.

  Judge Dismisses Dodd-Frank Challenge
A judge dismissed a suit challenging the constitutionality of the Consumer Financial Protection Bureau and the Financial Stability Oversight Council and seeking to overturn the appointment of CFPB Director Richard Cordray.

  More Headaches for BOA
The Washington Post reported that the U.S. government has sued Bank of America over its sale of mortgage-backed securities, saying the bank misled investors about the quality of the mortages on which the securities were based.

  Do You Blog?
Georgia Credit Union Affiliates launched a public/consumer blog,, that is aimed at educating, empowering and entertaining people on a range of topics.

Game Plan 2Rolling Out Your Plan
to Protect Your Members

In Georgia more than 47,700 messages have been sent to members of Congress asking them to protect the credit union income tax exemption. To date 68 Georgia credit unions have sent at least one message (please click here for totals). The ways in which these credit unions have gotten involved in the campaign are as varied and unique as the credit unions themselves. Some have focused solely on staff, some on staff and members. Some use social media and their websites to engage members; others utilize hard copy materials. There are credit unions placing phone calls to legislators’ offices, or sending postcards, or sending emails. And there are some credit unions that do all of the above and are constantly looking for new ways to get their staff AND members engaged. Looking for ways to roll out YOUR credit union’s plan to protect your members? Here is how one credit union is generating success:

United 1st Federal Credit Union
United 1st FCU has been consistently engaged in the Don’t Tax My Credit Union Campaign; sending emails to Congress through the call to action system, placing countless phone calls to the legislators’ offices, asking members to get involved with emails and connecting with members in the lobby with postcards for their legislators. CEO Pat Conn shared that they feel strongly that credit unions are an important part of the financial fabric of our country, as well as a vital part of the communities in which they serve. This issue is one of dire importance, as Conn says it “threatens the very existence of credit unions, and if credit unions do not get involved in this, we may not survive.”

While United 1st FCU is active on a wide variety of fronts in the campaign to protect credit unions and their members, they did not jump into every activity at once. Rather, they rolled out emails, then phone calls, and then phased into the postcards for members to complete in the lobby – and intend to hand- deliver the cards to the legislators’ district offices. The response they have seen has been positive, not just in the number of contacts, but with the members themselves. “Everyone has been very supportive in this effort to be a positive impact in our communities,” said Conn. “We take seriously our role as United 1st FCU ambassadors in our communities we serve.”

How did you educate your team? Conn stressed the importance of regular communication with staff and board members on any issue of importance: “At United 1st FCU we strive to be a knowledgeable resource so that both our staff as well as our Board is aware of things that may impact credit unions. With this knowledge, we are able to keep members informed of situations that may affect their financial condition. This can be accomplished through email, our website or through interaction at one of our branches with our staff.”

In addition to the emails, your credit union has been active in placing phone calls. How are you getting your team to engage? Openness is a key factor for involvement, as Conn shared they strive to communicate with transparency on all issues and train and educate staff on how to be an active member in the solution. Conn stated because of this transparency, “Our staff understands the importance of the issue and the effects it will have on internal and external members. This motivates and engages them to be an active participant in the solution.”

Are there any secrets to your success with this campaign? For United 1st FCU, their success is easy to pinpoint, per Conn: “The secret is our staff; we have a very engaged, active staff because we take time to ensure they are educated on the issues and are very transparent about the reasons we need to support the issues.”

Have you experienced any negativity or push-back from staff or members? “Not one bit,” said Conn. “Our staff members are taught from day one that they will be empowered to embrace expected and unexpected opportunities. This is one of them. They also know from our service standards that we all own this fight, we assume responsibility for it, and we will never assume others will do it for us.” Excellent work United 1st FCU, and excellent perspective!

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MetsgerMetsger Sails Past Senate to Join NCUA Board

On August 1st the U.S. Senate unanimously approved the nomination of Richard Metsger to be the third member of the NCUA board. The final step is to be sworn in; once that happens Metsger will join NCUA Chair Debbie Matz and board member Michael Fryzel, himself a former chair, to fill the three-member board. Metsger will fill the seat vacated late last year after the term of board member Gigi Hyland expired.

The new NCUA board member's nomination was widely supported and moved fairly quickly through the confirmation process – at least compared with some controversial posts like newly confirmed Consumer Financial Protection Bureau Director Richard Cordray's. Metsger, a former Oregon state senator, was named as a candidate by President Obama in June. A hearing on his nomination was conducted June 27th. The next scheduled NCUA open board meeting is Sept. 12th, and Metsger should be able to take his seat at the table by that time.

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Capitol dome at sunriseStudent Loan Fix Clears Congress

Legislation that would return the federal student loan rate to 3.4 percent now needs only President Barack Obama's signature to become law. The bill, known as the Bipartisan Student Loan Certainty Act, passed the U.S. House on a 392-31 vote on July 31st.

The federal student loan rate, which was previously capped at 3.4 percent, increased to 6.8 percent on July 1st when members of Congress could not agree on legislation to address the issue. This legislation would tie student loan interest rates to the 10-year Treasury note. Individual rates would be locked in for the life of the loan. Students and their families would also be protected from sharply increasing interest rates: Undergraduate loans could not exceed an interest rate of 8.25 percent.

The bill would save undergraduates $25 billion in student loan payments, and result in $3,300 less interest being charged per undergraduate student loan, according to congressional estimates. Caps of 9.5 percent for graduate student loans and 10.5 percent for PLUS loans would also be set. On the private student loan front, NCUA has told CUNA the agency will be releasing examiners' guidance on private student loans in the near future. The guidance will then be shared with credit unions.

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TreeGrowing Support for Credit Unions

The support for credit unions is growing outside our industry, with the National Cooperative Business Association (NCBA) sending letters to every member on the House Ways and Means and Senate Finance committees to "to strongly encourage" the federal tax policy makers to "advocate for the retention of the credit union tax exemption during your deliberations on tax reform." NCBA President/CEO Michael Beall wrote, "As not-for-profit, member-owned financial cooperatives, credit unions return almost all of their earnings to their member-owners. Whether this is in the form of better rates on savings and loans, lower fees, or generally better services, this is a real-world example of how credit unions use the tax exemption to make a difference in the financial lives of their members. In addition, the credit union presence in the financial marketplace demonstrably benefits non-members as well, by providing marketplace competition and enhanced consumer choice. Studies have shown that credit unions provide over $10 billion annually in benefits to members and non-members, an amount that far exceeds the Joint Committee on Taxation estimate of $500 million that a tax on credit unions would generate."

July 26th was the deadline for senators to submit their tax reform proposals to that chamber's Finance Committee leaders. But, while that deadline has passed, credit unions need to continue their campaign on Congress to protect the tax exemption while the legislators formulate any tax reform plans. Send a message today!

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ContactsWhy It Takes All of Us

While the total number of contacts made by Georgia credit union advocates is growing every day, do you ever wonder how many are actually going to your legislator? The table here illustrates the email contacts received by the Georgia delegation as of August 1st on the Don’t Tax My Credit Union Campaign.

Looking at it from this perspective, one can see that it takes ALL credit unions around the state to be involved, and not just the 68 who have started the process. Each legislator is important, and this effort is one that will benefit the entire industry. So please, get your credit union involved. It is vital to share the credit union message for not just today, but for the future; note that one of the legislators in the 2014 U.S. Senate race, Rep. Jack Kingston, has received the least amount of contacts with only 291!

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Steam trainHousing Finance Reform
Picking Up Steam

On August 7th The New York Times reported the White House is signaling it is time to move forward with reforming, or rather winding down, the government-sponsored entities Fannie Mae and Freddie Mac. The article highlighted that in the seven years since the housing market started to fall apart, politicians of both parties have promised repeatedly to build a better system for financing the American dream of owning a home, with little signs of progress. However, in a speech on August 6th, President Obama signaled Washington may be gaining steam on this issue. With the housing market on the mend, President Obama said it was time to “wind down” Fannie Mae and Freddie Mac. “I believe that our housing system should operate where there’s a limited government role and private lending should be the backbone of the housing market,” and the President praised a bipartisan Senate effort to replace Fannie and Freddie with a system that would charge lenders for explicit government guarantees of some mortgage loans.

And while there is a risk the cost of borrowing would increase, President Obama also said he wants to preserve the wide availability of the 30-year, fixed-rate loans preferred by most Americans. House Republicans are proposing a sharper retreat, preserving only the government’s support for lending to lower-income families. Proponents say it, too, would preserve the availability of 30-year fixed-rate loans, though they are not widely available in countries without government-backed systems.

From a credit union perspective: It is essential any legislation passed does not directly or indirectly price credit unions out of the mortgage market. If changes are made that create barriers to the secondary market for credit unions, they – and the members who rely upon them – will be hurt. Work continues in Congress to ensure ANY housing reform option is one that credit unions can continue to access.

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Time to payBankers Attack Credit Unions

On August 1st the American Bankers Association held a webinar for its membership – rolling out a new initiative in the quest to get the credit union tax exemption removed. Their message to Congress is that banks welcome honest competition, but fair play only happens on a level playing field (and hence, tax those credit unions), calling their campaign “ItsTime2Pay.” They have included in the campaign a sample op-ed message, ads, a speech to be used at small business meetings and a social media plan with the Twitter hashtag #ItsTime2Pay.

Credit unions must continue to educate their membership and employees and get them involved in our campaign to preserve the credit union income tax exemption. And Georgia bankers are involved; their Twitter message is: “What’s right about you, your family and me paying taxes and credit unions not? Credit union corporate welfare has to stop. #ItsTime2Pay”

If you and your staff have not already become involved in the campaign to let Congress know that they should preserve our tax exemption – now is the time.

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Hike at Home - Mullis
From left: Janet Mahle, CEO, Walker County Educators Federal CU; Deborah Wright, CEO, HealthCom Federal CU; State Sen. Jeff Mullis; Shannon Walters, CEO, Mountain Community Federal CU, and Vonda Bledsoe, branch manager, Georgia United CU.
Hiking in North Georgia

On August 7th credit union leaders from HealthCom FCU, Georgia United CU, Mountain Community FCU, and Walker County Educators FCU sat down with State Senator Jeff Mullis (R-Chickamauga) at a Hike at Home meeting to promote all credit unions. Sen. Mullis serves as the Chairman of the extremely powerful Senate Rules Committee, which has direct control over what bills can be moved forward to the full Senate for a vote. While he has been instrumental in stopping negative bills that could hurt credit unions in the past, this meeting was the ideal opportunity to build on his understanding of the industry. Our thanks to the credit union leaders for sharing their time creating strong inroads with one of the key leaders in the state legislature!

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Angry birdNot Angry Birds... Advocacy!

Browsing the app store on your phone? Check out the new credit union advocacy app by searching “CUNA Advocacy.” Whether you are Hiking the Hill, attending a town hall meeting in the district, or just want to keep up to date on the hot federal legislative issues, this app provides a wealth of resources, including talking points, videos, legislative directories and the ability to take action, right at your fingertips.

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August Provides Opportunity to Connect at Home

Congress will be out for recess for the month of August, and although this “break” is often viewed as a vacation for lawmakers, the reality is often far removed from this perception. Two recent articles from The Washington Post describe what this period of time is like for elected officials and the importance of the district work period for advocacy groups.

Town hall meetingLast month in his Wonk Blog, Ezra Klein described the competing demands on members’ schedules and the importance of the work they do when they return home to hear from their constituents. Klein spoke to Bradford Finch, the head of the Congressional Management Foundation, who said, “People tend to judge Congress by the part of the job they can see. And the part they can see is the legislative work on C-SPAN. But Congress has a representational responsibility as well. It’s meeting with constituent groups who come to Washington. It’s responding to communications. But it’s also going back home and engaging in activities in the district that help them understand what their constituents think.”

In the August 4th edition of The Washington Post this five-week period was highlighted as one that has become increasingly important to interest groups as part of a saturation –or “surround sound”– strategy. One quote from veteran Republican communication strategist Ron Bonjean hit home: “If you’re going to get anything to move, you have to appeal to the lawmakers back at home. The smart outside groups have always used the recess to get their message through. It’s just that now, the efforts are much more intense because of the gridlock in Washington.”

What does this mean for credit unions? The August district work period presents our industry with a fantastic opportunity to get the Don’t Tax My Credit Union message to members while they are home, so please use this time to spread the message if you see a lawmaker at a civic group, community event or town hall meeting! 

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Court Rejects Fed Interchange Cap Rule

On July 31st the U.S. District Court for the District of Columbia issued a decision striking down the Federal Reserve's price caps on debit interchange fees. U.S. District Court Judge Richard Leon said in his ruling the Fed did not follow congressional intent when it implemented the cap and other changes imposed by what is known as the Durbin Amendment.

CardsThis unwelcome news was an unfortunate surprise. While the majority of credit unions are not directly impacted by the Fed’s interchange cap (as it only applies to those institutions over $10 billion in assets), there are indirect consequences on all issuers. CUNA General Counsel Eric Richard said, "This decision will have a potentially devastating impact on the ability of small debit card issuers, particularly credit unions, to continue offering this vital payments service to their members and customers. The decision, no doubt, will challenge credit unions to continue their debit card programs without incurring drastic cuts in revenue, or imposing additional fees on their members - the last thing that credit unions want to do. Right now, the current debit interchange system remains the same. However, the court has signaled it is going to consider the current system further in the weeks to come. We are investigating our legal options on behalf of credit unions going forward."

CUNA and a broad coalition of trade groups filed an amicus brief in the case in April 2012, rebutting the merchants' suit’s charge that the Fed cap is too high. The brief countered that it is, instead, too low and does not allow debit card issuers to cover their costs and a reasonable rate of return on their investments. The Fed was charged with setting the debit fee limit under provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Fed's final rule, which became effective in October 2011, caps debit interchange fees at 21 cents for issuers with assets of $10 billion or more. However, the new Leon ruling said Congress spoke clearly and decisively, and the Fed's interpretation was not reasonable. His ruling vacates the Fed's interchange transaction fee and network non-exclusivity regulations and remands the rules back to the Fed. Stay tuned!

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Dodd-FrankJudge Dismisses Dodd-Frank Challenge

A district court judge dismissed a case challenging the constitutionality of the Consumer Financial Protection Bureau and the Financial Stability Oversight Council and seeking to overturn the appointment of CFPB Director Richard Cordray. This did not come as a surprise, but this is one more indication the CFPB will be with us for the foreseeable future.

The suit was filed last year by State National Bank of Big Spring (Texas), the 60-Plus Association and the Competitive Enterprise Institute in federal court in Washington, D.C. Alabama, Georgia, Kansas, Michigan, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Texas and West Virginia also joined the plaintiffs’ suit. NCUA Chair Debbie Matz and Cordray were among nine federal officials named as suit co-defendants because the officials are members of the FSOC (but the case did not seek to challenge NCUA separately).

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HeadacheMore Headaches for BOA

The Washington Post reported on August 6th that the U.S. government has sued Bank of America on the sale of its mortgage-backed securities. The two separate lawsuits state that traders at BOA willfully misled investors about the quality of the residential mortgages tucked into the securities the bank sold at the start of the financial crisis. These lawsuits were filed on August 6th by the Justice Department and the Securities and Exchange Commission.

The charges are the latest reckoning for the nation’s second-largest bank, which has been plagued by a series of lawsuits stemming from the housing crisis. The bank has been accused of discriminating against mortgage applicants, saddling the government with billions of dollars in troubled loans and a range of foreclosure abuses. Now BOA faces civil charges for allegedly hiding the risks associated with $850 million worth of securities backed by home loans. Justice claims the bank knew more than 40 percent of the 1,191 mortgages it bundled into securities did not meet underwriting guidelines and sold them anyway. Prosecutors estimate the total losses sustained by investors will exceed $100 million.

Federal prosecutors said the exact amount of civil penalties will be determined as the litigation proceeds. In the aftermath of the financial crisis, BOA has contended with a barrage of lawsuits over mortgage securities and residential foreclosures. The bank’s acquisition of mortgage giant Countrywide Financial in 2009 gave it an edge in the housing market and endless legal headaches. Analysts estimate BOA has lost nearly $40 billion on mortgage litigation and repurchases of soured loans linked to Countrywide. These new lawsuits, however, are tied to BOA’s own mortgage operations: Prosecutors say the bank made its employees churn out mortgages, placing quantity over quality to reap profits. One bank employee told prosecutors “her superiors pressured her to process applications as quickly as possible but to keep her opinions to herself,” according to the complaint.

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BlogDo You Blog?

GCUA has launched a public/consumer blog at With the intent of providing useful information to educate, empower and entertain people, the blog contains posts on a variety of topics. It is gaining some additional attention lately, with The Atlanta Journal-Constitution running excerpts from a back-to-school shopping post in the Living section on August 2nd. Guest submissions are welcome and can be sent via email to

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