February 11, 2014
Tuesday Edition
NCUA risk-based capital plan could cut CU capital buffers by billions

NCUA's proposed risk-based capital rule could prove costly for many credit unions, forcing them to increase their capital levels by a net $7.3 billion to maintain their current margins above the proposed "well capitalized" thresholds.

CUNA Chief Economist Bill Hampel explains, "We looked at the 2,504 federally insured credit unions with more than $40 million in assets, and compared their current margins above being well capitalized to what they would be if the NCUA proposal were in effect.  Although the rule would only apply to credit unions with more than $50 million in assets, many—if not most—of the almost 300 credit unions with between $40 million and $50 million in assets will exceed the $50 level in just a few years."
About one-third, or 863, of these 2,504 credit unions would enjoy greater buffers above well-capitalized thresholds under the proposal, but the total increase among these credit unions would be only $63 million, Hampel says. The remaining 1,641 credit unions with above $40 million in assets would see their cushions above well-capitalized thresholds shrink by a combined total of $7.4 billion if the proposal were in effect.

Read the complete article from CUNA News Now.

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Weather causing CU closings and late openings in Alabama

This year's severe winter weather continues in Alabama. Today many credit unions in central and northern Alabama are closing or delaying their opening time in an effort to avoid the traffic problems seen a few weeks ago.

To view the list closings announced on social media visit LSCU top stories.

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Washington wire

H.R. 3193, the Consumer Financial Protection and Soundness Improvement Act
This week, the House will consider an omnibus bill to restructure the Consumer Financial Protection Bureau (CFPB). The legislation combines several bills (H.R. 2385, H.R. 2446, H.R. 2571, H.R. 3193, and H.R. 3519) which were reported out of the Financial Services Committee late last year. Combined together, the bill under consideration by the House this week would:

  • Replace the director of the CFPB with a five-person commission
  • Enhance protection of personal information submitted to the CFPB
  • Adjust the voting threshold for the Financial Stability Oversight Council (FSOC) to stay or set aside CFPB rulemakings from 2/3 of the FSOC to a majority of the FSOC, and expand the matters for which the FSOC can take this action
  • Fund the activities of the CFPB through the appropriations process

Data Security and Cybersecurity
CUNA and the League were part of a joint trade letter on Wednesday in support of H.R. 3696, the National Cybersecurity and Critical Infrastructure Protection Act. The bill, which was marked up by the House Homeland Security Committee, calls for a partnership between public and private sectors to better protect our nation’s cybersecurity infrastructure, improves the provisioning of security clearances for those involved in cybersecurity information sharing and expands the existing Support Anti-Terrorism by Fostering Effective Technologies Act (SAFETY ACT). CUNA has made cybersecurity a top priority and hopes to work with Congress on this issue.

CUNA and the League expect additional hearings on data security to be called in the coming week, including possibly another in the Senate Banking Committee, as well as one in the House Financial Services Committee.
To further help you keep up with what is happening on this issue in Washington, the following resources may be helpful.

•    Roll Call published an article last week that does a very good job of reviewing the hearings at a high level
•    CUNA sent a memo to Congress last week addressing merchant’s misleading data security claims
•    Additional material on data security is on a dedicated page on CUNA’s website

 To read the complete legislative update click here

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InfoSight spotlight: Loans and Leasing

The Consumer Financial Protection Bureau (CFPB) issued a bulletin advising mortgage companies about their legal obligations that protect consumers during loan transfers between mortgage servicers and stated that the guidance reminds mortgage servicers that they are subject to federal laws.

Among the laws mentioned by the CFPB are these two acts that are discussed as separate topics on the Loans and Leasing channel of InfoSight:

  • Real Estate Settlement Procedures Act, a consumer protection statute that was passed in order to help consumers become better shoppers for settlement services and eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services
  • Fair Credit Reporting Act, which regulates "consumer reporting agencies," including credit bureaus; restricts the use of consumer reports to their legitimate purposes; prohibits the dissemination of outdated credit information; and requires disclosure to consumers and employees when adverse action is taken as the result of credit reports or other consumer information

Visit today for the details you need to remain in compliance with these acts!

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Calling young CU leaders for World Council International Scholarship Program

World Council of Credit Unions is accepting nominations from its member organizations for the World Council Young Credit Union People (WYCUP) scholarship program, an international networking and educational opportunity for promising credit union leaders.

The nomination deadline is June 16. The program and awards ceremony will take place at the 2014 World Credit Union Conference in Gold Coast, Australia, July 27–30, 2014.

The WYCUP program seeks individuals who are 35 or younger, passionate about credit unions and interested in networking with a tight-knit group of young leaders from around the world to exchange their experiences in the industry. 

WYCUP scholarships will be awarded to five recipients for an all-expense-paid trip to the 2015 World Credit Union Conference in Denver, CO. In addition, conference registrants age 40 and younger qualify for a discounted registration fee and can participate in the joint WYCUP/Emerging Leaders program with Customer Owned Banking Association in Australia, regardless of whether or not they apply for the scholarship.

 For more information on the WYCUP scholarship program, click here. For questions, contact Lili Tangwall at  608.395.2043.

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In This Issue
Tuesday Edition
NCUA risk-based capital plan could cut CU capital buffers by billions
Weather causing CU closings and late openings in Alabama
Washington wire
InfoSight spotlight: Loans and Leasing
Calling young CU leaders for World Council International Scholarship Program
LSCU & Affiliates Media

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Upcoming Event Deadlines
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Feb. 20 SAS CU Conference, Birmingham, AL
Feb. 20 Required IT Risk Assessment Program
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