|Every Quarter Counts!
Credit unions have been engaged in the Don’t Tax My CU campaign since the middle of May, and Georgia credit unions have generated over 94,000 messages to Congress (click here for totals). With any long campaign, it is easy for fatigue to set in – especially when staff and members are involved. However, you are making a difference. It is important to keep a focused eye on what is happening, help shape what can impact your credit union, and continue in the steps to protect the members who rely upon not-for-profit financial cooperatives for their financial needs. Think of any football game, and how many are determined in the fourth quarter – it is not over until it is over, and your members need you to get them engaged. But how? Below are the stories of two credit unions that have utilized an “every quarter counts” mentality, fought back the fatigue and engaged in a variety of ways, including social media.
Health Center Credit Union
It is vital that credit unions of all shapes, sizes, charters and locations get involved in the campaign, and Tallent shares why it is important to everyone: “While we are not-for-profit institutions, we still need profits to provide services and pay employees; otherwise we are forced to close our doors. This would not only negatively affect the 96-plus million credit union members by removing their choice in affordable financial options, but also puts the jobs of thousands of credit union employees in jeopardy.” This last point is summed up perfectly by Jennifer Leisey, Business Development Coordinator of Health Center CU, which has been actively involved in keeping the credit union engaged: Get involved to “save your job!” The steps these credit unions have taken are helping keep this message fresh, and keeping members involved.
What steps did you take to educate your board, team and/or your members? The credit union kept the message in front of the staff and board, and discussed the Don’t Tax My CU campaign during monthly meetings. Leisey shared it is this regular information that is key: “We kept them informed of the most recent happenings with the Don’t Tax My CU movement and continue to update on our contact number growth to stay encouraged toward reaching our goal.” And they keep the message fresh and constant, alleviating fatigue by utilizing several channels to reach out to members:
Your credit union has engaged in the campaign in a variety of ways; what was the secret to being successful in getting contacts? As you can see from the above, Health Center CU use a variety of methods to get the word out. Leisey explains the strategy: “Try everything, and keep it out there ─ if you only use one form of media to spread the word, you may miss a large portion of your audience.” She also likens it to other ad campaigns a credit union runs, sharing that “a member may need to be exposed to the message several times before they act.” While this activity is widespread, it takes being involved in a variety of ways to keep the message to Congress consistent!
What made you decide to engage on Twitter/social media? The credit union put the message out via social media because it “is the future.” Leisey shared, “As times change it is becoming the fastest and most cost effective way to contact a larger/younger audience quickly.” If your credit union is considering engaging in social media, don’t let numbers keep you out of the water; Tallent shares tips on how to make the most of it: “Currently we do not have a large following among our membership base on social media, but the use of hashtags like #DontTaxMyCU and #CUrally, as well as the ability to tag @CUNAadvocacy, allows us to amplify our voice and add strength to the movement.”
Did you experience any negativity or push-back from staff or members? Tallent cites that “This program was very well received by our staff as well as our members, and it has assisted in offering a platform to educate many of our members who may not have been fully informed of the tax status of credit unions or how very different our structure is from other financial institutions.” The opportunity to share why credit unions are unique is only a positive!
Northwest Georgia Credit Union
What steps did you take to educate your board, team and/or your members? Graves shared that the credit union has “discussed the issue at several board meetings, and many of our staff members attended a chapter meeting where the issue was highlighted.” This information was layered upon to build strong understanding, as the credit union distributed the Don’t Tax My CU postcards to staff, board and members. And, it has reinforced this message by highlighting it in a variety of avenues:
Your credit union has engaged in the campaign in a variety of ways; what was the secret to being successful in getting contacts? Focus is key in any action, and Graves expressed being purposeful in these efforts. “I believe our success in getting contacts has been a result of the continuing focus we have placed on the issue both in our branches and through digital channels. We have not let up in our efforts!”
Did you experience any negativity or push-back from staff or members? Graves shared there has been none. Instead, the credit union has “received calls and emails from members asking what else they can do outside of the steps outlined on the Don’t Tax website.” This type of reaction is impressive, and one that speaks volumes for their relationships with their credit union. Graves commented, “Our members and staff understand the importance of preserving credit unions’ tax exempt status, and have really gotten behind our efforts.” Great job!
|Senate Committee to Hear CU Perspective on Housing Reform
Next week on November 5th, CUNA Senior Vice President and Chief Economist Bill Hampel will testify on how to protect credit unions' access to the secondary mortgage market. Hampel will be before the Senate Banking Committee during its hearing on "Housing Finance Reform: Protecting Small Lender Access to the Secondary Mortgage Market."
|Building Support to Delay CFPB Mortgage Regulations
House Financial Institutions and Consumer Credit Subcommittee Chairman Shelley Moore Capito (R-WV) is circulating a letter to members of the House of Representatives urging the CFPB to delay the implementation of the Dodd-Frank Act mortgage regulations. More than 50 members have agreed to sign the letter, with others expected before the letter is sent to Richard Cordray. CUNA, on behalf of credit unions, is very supportive of this letter. In addition, CUNA staff reached out to the Committee during the shutdown to encourage them to pursue legislation on this matter – and if the letter does not receive a positive response from the CFPB, CUNA will continue to encourage Congress to enact a legislative remedy.
|An Eye on Money Laundering
Bills that would close loopholes, tighten anti-money laundering laws, encourage greater transparency and give financial regulators enhanced civil powers to hold financial services executives accountable for misconduct on their watch for violations of the Bank Secrecy Act were introduced by two high-ranking U.S. House members on October 24th. House Financial Services Committee Ranking Democrat Maxine Waters (D-CA) noted that "a number of recent, high-profile cases show how several multinational banks actively turned off anti-money laundering controls to accommodate terrorist financing and drug cartels."The U.S. Department of Justice has levied high fines against these banks, "but not a single individual has been held accountable," Waters added. Her bill, the Holding Individuals Accountable and Deterring Money Laundering Act (H.R. 3317), would seek to "correct that injustice by making it easier to go after unscrupulous bankers and mandating punishments as strict as those the imposed on the drug dealers themselves." The bill would achieve this, in part, by allowing regulators to remove or ban bankers who violate the law and by making bank executives personally liable for misconduct.
|No More Trolls!
On October 23rd, House Judiciary Committee Chairman Bob Goodlatte (R-VA) introduced a bipartisan bill H.R. 3309 to address the growing problem of "patent trolls." Patent trolls are non-practicing entities (NPEs) that bring abusive patent litigation (filing claims to patents in an attempt to collect licensing fees) against financial institutions and other businesses. Critics of the current patent system say the problem involves some patent holders who are abusing the system. Rather than incentivizing the creation of the next generation of advancements, they say, the abusers are instead suing unsuspecting consumers and extorting settlements.
A section-by-section synopsis can be found here. Financial Institution lobbyists will work to strengthen the bill's end-user protections. End users like credit unions and banks fall victim to patent trolls when NPEs ─ which hold patents but do not use or manufacture the patented technology or concept ─ solicit “licensing fees” from firms using common but patented technology, threatening legal action if a fee is not paid.
|Taking It to the White House
Credit unions took their message to the White House when Jason Miller, special assistant to the President in the National Economic Council, and NEC Senior Advisor Brett Taxin met with CUNA CEO Bill Cheney and senior CUNA staff on October 21st to discuss credit union concerns on a range of issues, including tax reform. Addressing credit union tax status issues with the White House comes at a critical time as House Ways and Means Committee Chair Dave Camp (R-Mich.) and Senate Finance Committee Chair Max Baucus (D-Mont.) have underscored that they remain committed to tax reforms. Tax reform could also be discussed as the budget conference committee meets in the coming weeks. Other topics of discussion included:
|Recent Shutdown + Tax Reform = Urgency for CUs
Curious what all the fuss is about on the Don’t Tax My Credit Union campaign? On October 19th The New York Times published an article highlighting the urgency on this message perfectly. It illustrates how, with the recent tense fiscal deadlock in Congress, Washington, D.C. is gearing up for the next political fight with billions of federal dollars at stake: tax reform! With automatic cuts to the military set to take effect by January and a separate round of cuts scheduled for Medicare, lawmakers will have to decide who gets hit the hardest. And lobbyists for special interests are gearing up to ensure that the slices of federal money for those groups are spared in new negotiations over government spending. Credit union members are among those special interests!
It is a debate almost no one involved wants to have so soon after the nasty fight over the federal budget, which produced the 16-day shutdown and again failed to reverse the automatic cuts resulting from previous disagreements. But Congress managed to reopen the government and extend the nation’s borrowing limit largely by creating a new series of deadlines running through February, giving special interests several chances to influence the process. The article highlights several industries already gearing up, and shared the lobbying push is likely to continue at least until early next year, before Congress again gets distracted by coming elections.
The lobbying factions will not, in most cases, be attacking one another. But with Republicans insisting they will not back down from spending limits set by the 2011 sequestration legislation, and rejecting calls by Democrats for new tax revenue, the cuts will almost certainly have to hit some interests, creating unavoidable conflict. “Everybody who has a piece of pie is now going to try to protect their piece of the pie,” said Steve Elmendorf, a former House aide who now runs a Washington lobbying firm representing the defense and health care industries. Joel Packer, the top lobbyist for the Committee for Education Funding, spent last week giving a series of pep talks to education officials across the United States, urging them to get involved. Sound familiar? Get your credit union involved in the Don’t Tax My CU campaign today!
|Proposed Fix to Flood Insurance Program
House Financial Services Committee Ranking Member Maxine Waters (D-CA), along with Georgia U.S. Senator Johnny Isakson (R) and others, announced a bipartisan legislative solution that would create a four-year delay to planned changes to the National Flood Insurance Program. The changes, required under the Biggert-Waters Flood Insurance Reform Act, include precipitous increases in federal flood insurance premiums. The legislation would delay implementation of rate increases until two years after FEMA completes an affordability study, which in itself is expected to take two years to complete. The rate delay would apply to primary, non-repetitive-loss residences that are currently grandfathered; all properties sold after July 6, 2012, and all properties that purchased a new policy after July 6, 2012. The bill also would require FEMA to propose regulations that address identified affordability issues posed by the premium increases. Read more about this.
|Pushing for CU Relief
CUNA is urging U.S. Senate leaders to bring up the Privacy Notice Modernization Act of 2013 (S.635) for consideration to relieve just one of the many compliance burdens on credit unions. CUNA joined a coalition of financial services and business trade groups in a letter to Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY). In the letter, CUNA and partners said the "common sense measure would reduce the significant costs institutions incur providing unnecessary disclosures and more importantly give (consumers) a break from redundant notices."
The Senate bill currently has 39 bipartisan co-sponsors, including both Senators from Georgia, Sens. Saxby Chambliss and Johnny Isakson. And, Consumer Financial Protection Bureau Director Richard Cordray has expressed support for the measure. The letter to Reid and McConnell was co-signed by the American Bankers Association, the American Financial Services Association, the Consumer Bankers Association, the Financial Services Roundtable, the Independent Community Bankers Association, the National Association of Federal Credit Unions and the U.S. Chamber of Commerce.
|Rep. David Scott Shares His Support of CUs
Ever wonder if your visits to Congress (both in D.C. and at local Hikes at Home), your emails, and your tweets are worth the effort? When it comes to the potential to repeal the corporate income tax exemption being floated around in Congress, Georgia Rep. David Scott (D-13) has received the message loud and clear. The Congressman recently sent the following message to GCUA and asked us to share it with all Georgia credit union loyalists:
“Credit unions play an integral part in the nation’s financial system by providing essential financial services to their members. As not-for-profit financial cooperatives, credit unions are run and operated by members and any surplus profit is given back to members in the form of lower rates. Credit unions are critical to working families and the middle class. Taxing credit unions and their members is essentially another tax on working families and could result in higher loan rates and a reduction in basic services. I strongly support maintaining credit union’s tax-exempt status.”
So, next time you are asked to visit with or share a message with an elected official – know you make an impact. Please remember what you are doing today could pay big dividends for all credit unions in the future when it is needed.
|Legislators Celebrate ICU Day
On October 17th, the Augusta Area Credit Union Chapter and the Chattahoochee Valley Credit Union Chapter connected with area elected officials in their celebration of International Credit Union Day. These meetings were an ideal opportunity to highlight what makes credit unions unique, and demonstrate what sets them apart from other financial institutions. At the Chattahoochee Valley Chapter meeting, the legislators witnessed firsthand the positive impact credit unions make by being a part of a Children’s Miracle Network check presentation, and Sen. Hardie Davis (D-Augusta) spoke to the Augusta credit unions on how they are an important source of stability in the economic sector, praising the industry for being one that cooperates with each other for the betterment of the members. Our thanks to these credit unions for “creating influence” with their legislators at the meetings!
Credit unions all around the state have engaged in local in-district meetings with key legislators to build relationships, and these connections have been extremely beneficial in growing the influence for the industry. This week credit unions sat down with two state legislators who were extremely helpful in the past state legislative session: State Rep. Trey Kelley (R-Cedartown) and State Rep. Wendell Willard (R-Sandy Springs). These meetings were designed not only to thank them for their support of credit unions, but to glean insight on what may arise in the upcoming state session in January:
|Fed Interchange Rule Bad, Court Ruling Worse
The Federal Reserve Board has made errors in implementing the Dodd-Frank-imposed debit interchange fee cap, CUNA said on October 21st in a legal brief, but a July 31 court ruling overturning the rule would make things “significantly worse.” The ruling "compounds the (Fed's) legal error through a construction that would require deep cuts ─ amounting to many billions of dollars each year ─ into issuers' remaining interchange-fee revenues,” warned the amicus brief filed on behalf of credit unions and other financial institutions.
CUNA said the court ignored the fact that the statute provides that the interchange fee “shall be reasonable and proportional to” that transaction cost. In choosing that language, Congress invoked the established constitutional principle that price regulation may not deprive one of the right to earn a reasonable return. The court and Fed also depart from congressional intent in their interpretations of the network non-exclusivity clause, the brief said. CUNA wrote that while the Fed final rule departs from intent by requiring issuers to negotiate contracts with unaffiliated networks so as to “enable multiple networks on a debit card,” the court's interpretation departs further. The court's interpretation that issuers must enable additional networks on their debit cards, the brief said, would force issuers to spend billions of dollars developing complex technology that did not, and does not yet, exist. The Fed's brief in support of its appeal was submitted on the same date, and merchants have until Nov. 20 to respond. The Fed has a Dec. 4 deadline to reply to that.
|Media Takes Note:
CUs Stepping Up to the Plate
Credit unions received media coverage across the country for helping members navigate the government shutdown, serving the Hispanic market and offering great loan rates. An article about the government shutdown on CNNMoney described how many credit unions are working with furloughed employees, offering services such as special loan rates, salary equivalent loans and skip-a-payment programs. Here in Georgia, several credit unions were highlighted in an article on WRBL News 3 for their efforts in assisting government employees affected by the shutdown. Credit unions mentioned include:
The efforts of credit unions to help members in this time of financial uncertainty have been highlighted with legislators (both state and federal), who have been amazed at the industry’s focus on helping members afford life.
|Billion-Dollar ‘Blueprint’ Bank Settlement
On October 21st The Washington Post reported that the Justice Department plans to use its tentative $13 billion settlement with JPMorgan Chase as a blueprint for reaching similar deals with other banks in probes related to bad mortgages and the 2008 financial crisis, according to a law enforcement official familiar with the negotiations. This deal is tentative, and as of October 30th there is talk of the agreement breaking down due to the bank’s concern about further criminal charges. However, if such an effort is successful, it could usher in an era of high-priced settlements throughout the banking industry. Justice Department officials plan to expand the use of a 1980s law carrying a relatively low burden of proof and gives prosecutors 10 years to pursue such cases, twice as long as under standard securities law.
Under this model, the department would also require some of the settlement money be directed to consumers; in JPMorgan’s case, $4 billion would be set aside for struggling homeowners. The department would also refuse to allow banks to avoid criminal prosecution by paying higher civil penalties. The strategy will give the Justice Department several more years to extract multibillion-dollar fines from banks eager to rid themselves of crushing legal burdens. Yet the possibility of a criminal component could make some banks wary of doing a deal; this is the current sticking point in the “tentative” agreement.
JPMorgan was accused of selling mortgage securities it knew were faulty. Nearly every major bank, including Bank of America and Citigroup, participated in the housing boom, issuing mortgages and bundling them into securities sold and traded like stocks. When the housing market crashed, investors lost billions and the banks were accused of selling mortgages they knew were doomed. Now, many financial institutions are battling a mountain of litigation. Many cases have been resolved, but many more are pending. And if JPMorgan’s agreement becomes the model for future government deals, the industry could be in for huge fines.
|Georgia Banker to Head American Bankers Association
On October 23rd the Atlanta Business Chronicle reported that Dan Blanton, the president and chief executive officer for Augusta-based Georgia Bank & Trust, was elected vice-chairman of the national banking organization at its annual convention in New Orleans, meaning he will be chairman-elect next year and chairman in 2015. Blanton was elected to the association’s board of directors in 2010 and has been a member of its Community Bankers Council since 2004.
Foothold in U.S.
On October 29th The New York Times reported that microcredit lending is gaining a foothold in the U.S., citing loans ranging from $1,500 to $8,000 with no collateral and few questions asked. Since the financial crisis, microcredit has taken off, attracting thousands of clients who do not qualify for credit cards or traditional bank loans. The purpose of the loans, as conceived by Muhammad Yunus, the Nobel Prize-winning founder of Grameen Bank, is to help countless millions of poor people unlock their inner entrepreneur, to “use money to make money.” But its newfound popularity may say more about the increasingly unstable nature of American poverty, in which credit is hard to come by and sustenance is cobbled together from part-time jobs and threatened by unpredictable expenses.
Microlending in general has boomed, more than tripling the number of borrowers from 2008 to 2011, according to data collected by the Aspen Institute and Grameen America. Grameen was founded in 2008 and has rapidly become a leader in the field. It has 18,000 borrowers and as of last month lent more than $100 million. Most borrowers, Grameen reports, repay their debt and become repeat customers. Borrowers are also given savings accounts and encouraged to save at least $2 a week. But, with more than 45 million Americans living below the poverty line, Grameen has barely scratched the surface of the problem. It is difficult to tell how well the program is achieving its aim of lifting people into the middle class. From a credit union perspective, it is important for consumers to be aware that their credit unions are there to help them afford life!
|Don’t Be Left Out! Submit Switch to Save Data
Almost 1.35 million members in Georgia were represented by the 36 credit unions participating in last month’s “Switch to Save” statewide campaign. Thanks to all the participating credit unions who took advantage of this program to increase lending and elevate the profile of Georgia credit unions.
Participating credit unions are reminded to record their results, either on a loan-by-loan basis through the online reporting form here, or by submitting a summary report of the number of loans, types of loans, and member benefit/savings during the campaign.
This information is invaluable when we tell the credit union story to legislators and representatives of statewide media, and your cooperation is greatly appreciated.
|Sharing the Co-Op Message
GCUA’s public advocacy was out and about in early October educating local business leaders about the value of cooperatives and the service they provide to consumers and the communities they are located in. Mike Mercer, GCUA president and CEO, was the guest speaker at the Houston County Chamber of Commerce on October 4th and shared how cooperatives are present in most sectors of the economy and that cooperatives empower people to achieve economic self-sufficiency and improved well-being. Mercer also shared some of the challenges and opportunities faced by cooperatives today. To see the slides of the presentation, click here. Mercer was the guest of Cheryl Spires, CEO of Combined Employees Credit Union in Warner Robins.
|Member Surveys Are Ready!
Twice each year GCUA creates member surveys designed to obtain consumer opinions on issues ranging from their own financial situations to their outlook on the overall economy. This information is used to craft news briefs for journalists around the state. So far this year, thanks to participation by Georgia credit unions, the statewide public relations campaign has received more than 29 million impressions.
The second 2013 survey is open and can be found here. It will run through November 21 and will take only a few minutes for your members to complete. You are encouraged to post a link to the survey prominently on your website and/or social media pages, and include it in your email marketing if possible.
The data gathered from the responses will help GCUA inform the media, legislators and other audiences about consumer behaviors and outlook on the economy. It will also keep Georgia credit unions high on the list of go-to resources for the media during our 2014 public relations campaign.