June 23, 2014
Monday Edition
Data Breach Notification Law signed by Gov. Scott

Friday, Florida Gov. Rick Scott signed SB 1524 by Sen. John Thrasher (R-St. Augustine) into law. The bill, which the League worked on during session, updates Florida's data breach notification laws, giving more power to the attorney general to protect Florida's consumers from data breaches. While the law does not go as far as requiring merchants to reimburse financial institutions for losses that occur during a breach, it is a good step in the right direction of making data security a priority in Florida.

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President's point

Late last week the U.S. Senate confirmed the appointment of Mark Watters to the NCUA board. This was a process that took more than six months. He just needs to be sworn in, which is expected to happen in the next few days in Texas. This means that Mike Fryzel’s tenure on the board is coming to an end. He will stay on until the swearing in ceremony. This sets up an interesting dynamic on the NCUA board. Chairman Debbie Matz and Board Member Rick Metsger are Democrats and Watters is the lone Republican.

Watters first order of business will be jumping into the risk-based capital proposal. I’m sure he’s already familiar with the proposed rule. However, no one knows what his feelings are about credit unions' interest rate risk. During the confirmation process, he said that “credit unions should continue doing what they are already doing.” When asked about the role of a regulator, McWatters said “overregulation of small credit unions is a potential problem and that ‘more work needs to be done.’” These are both positive signs. However, we all need to educate him on our thoughts about the proposed rule and the changes that need to be made. He says he’s committed to looking at it closely.

On Friday, Watters former boss, the current chairman of the House Financial Services Committee, Jeb Hensarling (R-TX), as well as Rep. Shelley Moore Capito (R-WV), who heads the House Financial Services subcommittee on financial institutions and consumer credit, submitted a joint letter asking the NCUA whether its proposed risk weights - which deviate markedly in some areas from the standards banking regulators have applied for banks - are appropriate. They also listed many other concerns with the proposed rule.

Last week, CUNA staff met with Board Member Metsger and he appears to be open to listening to credit unions' concerns. He indicated that he is reading the more than 2,000 comment letters. That's a good sign. I think this summer’s listening sessions will have a major impact on the proposed rule. The comments letters, the letters from current and former Members of Congress, and meetings with CUNA are nice, but face-to-face meetings with credit unions and hearing their stories of the real world impact will be greatly beneficial. The listening session are sold out.

This risk-based capital fight will also have an interesting effect on Chairman’s Matz’s tenure leading the board. With her seat up in April 2015, it’s widely believed that this proposal is her legacy on the board. She was very adamant about not allowing more time on comment letters. The story in the Wall Street Journal and her column in the Bloomberg publication show that she has dug in on this issue. With her term up in 10 months, it’s a good bet that she is trying to get this rule passed and in the registry before her term is up. I hope that isn’t the case. We’ll know more next month when she talks more openly about it at the listening sessions. The League will attend two of the sessions and we’ll report the conversations in eSignal Daily.

Where’s Patrick: This week I will be in California at the first part of the week taking part in a Florida Senate Republican fundraiser. Later this week we will hold our quarterly staff meeting. To see my tentative schedule for the next two weeks, click here.

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Appraisal exemptions would be extended under NCUA plan

The proposal would eliminate a redundant requirement that federal credit unions make a copy of an appraisal used in connection with that member's application for a first-lien loan on a dwelling available to any requesting member. It would narrow the scope of this requirement to cover only loans secured by a subordinate lien on a dwelling. 

Federal credit unions would still be subject to the requirement that all creditors must automatically provide applicants with free copies of all appraisals and other written evaluations developed in connection with an application for a loan to be secured by a first lien on a dwelling. 

The proposed rule also requires the appraisal to be available for a period of 25 months after the applicant has received notice from the credit union of the action taken on the application for a loan secured by a subordinate lien on a dwelling.

The second proposed change would exempt a transaction from the appraisal requirement involving an existing extension of credit at the lending federally insured credit union, provided that: 

  • There is no advancement of new monies, other than funds necessary to cover reasonable closing costs; or
  • There has been no obvious and material change in market conditions or physical aspects of the property that threatens the adequacy of the credit union's real estate collateral protection after the transaction, even with the advancement of new monies.

The board is allowing a 60-day comment period for the proposed rule after it is published in the Federal Register. The Credit Union National Association will post a Regulatory Call to Action to seek feedback from credit unions on this proposed rule.

Click here to read the full story from CUNA News Now.

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Report youth presentations by June 30 for a chance to win

Did you know that Michigan leads the nation in credit union youth financial education (an important distinction that shows the credit union commitment in this area)? This is based on national reports collected by the National Youth Involvement Board.

How are we doing? No one knows! Currently, only three credit unions are reporting in Florida and zero in Alabama. The League knows each and every one of you are doing some kind of financial education – and it is time to begin quantifying it! LSCU wants to be able to tell lawmakers, teachers, and community leaders about how Alabama and Florida credit unions are highly involved in helping youth build a strong financial future, but the League can’t do that without the numbers to prove it.

Please take a few minutes to report presentations conducted for young people ages five to 22 (by any staff member or volunteer in your credit union) by the reporting deadline of June 30.

To make it a bit more rewarding to report your youth presentations, all LSCU member credit union staff reporting presentations by the NYIB deadline of June 30 will have a chance to win one of four $50 Visa gift cards from LSCU & Affiliates.

Reporting is easy on the NYIB website. Any presentation that promotes financial literacy or the credit union movement qualifies. Presentations do not have to be in a traditional classroom setting. Qualifying presentations can include those to your young members or to any church or community youth groups or with schools, libraries, and community colleges.

For reporting questions or assistance contact Regional NYIB Representative Juli Lewis, Suncoast Credit Union, 813.621.7511 ext. 87981.

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In This Issue
Monday Edition
Data Breach Notification Law signed by Gov. Scott
President's point
Appraisal exemptions would be extended under NCUA plan
Report youth presentations by June 30 for a chance to win
LSCU & Affiliates Media

Contract Management
LEVERAGE has a contract management solution that is web based and easy for your credit union to stay on top of all of the credit union's various contracts.

Southeastern Credit Union Foundation
The Southeastern Credit Union Foundation works hard for Alabama and Florida credit unions. The foundation offers five pillars: financial education, professional development, disaster relief, fundraising, and the credit union philosophy. This video gives a better explanation to what the foundation offers credit unions.

Upcoming Event Deadlines
July 1 Last Day for Early Bird Rate – Southeast Supervisory Committee Conference – Point Clear, AL
July 15 Last Day to Register - LSCU BSA Essentials & Advanced Workshops - Mobile, AL
July 15 Last Day to Register - LSCU BSA Essentials & Advanced Workshops - Huntsville, AL
Aug. 1 Last Day to Register - Southeast Supervisory Committee Conference - Point Clear, AL
Aug. 5 Last Day for Early Bird Rate – LSCU Fall Regulatory Compliance Update – Tallahassee, FL
Aug. 7 Last Day for Early Bird Rate -  LSCU Fall Regulatory Compliance Update – Birmingham, AL
Upcoming League Events
June 24 - Reg E & Debt Card Error Resolution
June 25 - Mobile Remote Deposit Capture
June 28 - July 2 - America's Credit Union Conference
July 1 -  Will AML/BSA/OFAC Meet Examiner Scrutiny?
July 2 - Consumer Loan Documentation
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