July 24, 2014
Thursday Edition
Matz plans new regulatory relief actions

“NCUA’s annual regulatory review, coupled with my Regulatory Modernization Initiative and the questions and concerns we heard at the recent listening sessions, will continue to result in actions that cut red tape, provide new flexibility. and make it easier for credit unions to serve their members,” said NCUA Board Chairman Debbie Matz.

Matz spoke to 1,200 attendees at a conference and described the planned and proposed regulatory improvements as part of the Regulatory Modernization Initiative.

New Regulatory Relief Rules:

    • Three relief proposals planned for upcoming open meetings of the NCUA Board: eliminating the fixed-assets cap, modernizing member business lending and updating appraisal provisions.

    • NCUA board plans at its July open meeting to propose a rule effectively eliminating the five-percent cap on fixed assets. The proposal would streamline the process for federal credit unions to occupy land or buildings.

    • Later this year, the NCUA board will look to give greater flexibility to credit unions offering member business loans.

    • The NCUA board is scheduled to update the advertising rule for federal credit unions and the agency would be working to incorporate the latest technology, including social media, into the new proposal.

    Current Regulatory Relief Rules

      • Three relief proposals that were put out for comment in the second quarter: facilitating associational fields of membership, expanding investment authorities, and removing redundancy in appraisals.

      • After finalizing a rule in January to authorize derivatives, the NCUA board in June followed up with a proposed rule to authorize qualified federal credit unions to securitize their own assets for sale as investments. The proposal is open for comments through Aug. 25.

      • Also open for comments through Aug. 25 is a proposed rule to eliminate a redundant requirement for appraisals. The proposal will remove the NCUA appraisal provision that is superseded by mortgage rules from the Consumer Financial Protection Bureau. At the same time, NCUA proposed a change to assist members who are underwater with their mortgages.

      The full text of the chairman’s speech is available here.

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      Filene reports 85 percent of members feel 100 percent safe with a CU

      Because they hold credit unions in such high regard, credit union members are more likely than bank customers to keep a greater portion of their holdings with their financial institution--an encouraging development as credit unions continue to seek ways to expand member outreach, according to a new Filene Research Institute white paper.

      "The Consumer Experience: Financial Institution Preference and Usage Factors," which analyzed McKinsey and Co. survey data from 2013, found that 85 percent feel their assets are completely safe at their credit union, while only 68 percent of bank customers feel the same about their institution."Credit unions can't prevent every member from shifting their funds or closing their account, but the current outlook for growth is extremely promising," the report noted. "Research is showing how effective credit unions are at creating trust with their members.

      "As long as this trust is sustained, there is no reason to think credit unions can't grab more market share," the report continued. "We have learned that consumers choose financial institutions based on income, age, and attitudes toward service offerings. These preferences are always subject to change. The onus will be on credit union leaders to ensure they don't."

      Click here for more information.

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      Sen. Shelby sends letter to NCUA

      Today, Sen. Richard Shelby (R-AL) sent a letter to the NCUA expressing his concerns over the proposed rule change regarding risk-based capital. Many of the concerns Sen. Shelby conveys mirror what the LSCU and CUNA have been sharing with his office and this letter should go a long way in helping correct this misguided idea.

      In the letter, Shelby begins by saying the proposal will “unduly burden communities served by credit unions” and the rule has “potentially no beneficial upside.” Additional concerns raised involved whether the NCUA has the authority under the Federal Credit Union Act (FCUA). Shelby states “The FCUA conveys authority to NCUA only to establish a risk-based standard to weigh risk in circumstances where the net worth ratio does not provide adequate protection.” He continued saying the proposed rule imposes a risk-based standard to be well capitalized, which is could be beyond the scope of the FCUA.

      Sen. Shelby concluded his letter citing the fact that credit unions and the Share Insurance Fund performed well during the last two financial crises and the proposal is a “solution in search of a problem.”  While Sen. Shelby supports safety and soundness efforts, he is not convinced the proposal is necessary or that due diligence was conducted. Shelby notes the overwhelming number of Congressional contacts the NCUA has received since the inception of the proposal and closes by saying “I would also like to join them in their concerns as well.”

      The League would like to thank Sen. Shelby for writing this letter and supporting Alabama’s credit unions.

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      President of Defense Credit Union Council thanks Miller for introducing HR 5061

      Poland A. Arteaga, the president of the Defense Credit Union Council, Inc., sent a letter to Rep. Jeff Miller (R-FL) this week thanking him for introducing HR 5061, a bill Miller worked closely with the League's GA team on. HR 5061 seeks to amend the Federal Credit Union Act to exclude extensions of credit made to veterans from the definition of a member business loan.

      In his letter Arteaga said, "On behalf of the Defense Credit Union Council (DCUC), our nearly 200 member credit unions worldwide, and most importantly the 18 million consumers who are members of defense credit unions, I want to thank and commend you for introducing H.R. 5061. This legislation would expand  the economic opportunities for veterans  by  enhancing their ability to receive small business loans from credit unions."

      Arteaga continued, "This common-sense initiative will provide real help to veterans who want to start or expand a small business. This is particularly important to our returning veterans, who are looking for ways to resume civilian life in a productive and involved manner. By working to foster a private-sector approach to a very real capital access problem for veteran entrepreneurs in the marketplace, you have sent an important and powerful message about the value of service to our country."

      Click here to read the full letter.

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      In This Issue
      Thursday Edition
      Matz plans new regulatory relief actions
      Filene reports 85 percent of members feel 100 percent safe with a CU
      Sen. Shelby sends letter to NCUA
      President of Defense Credit Union Council thanks Miller for introducing HR 5061
      LSCU & Affiliates Media

      2014 Southeast Credit Union Conference and Expo

      The LSCU & Affiliates hosted the Southeast Credit Union Conference and Expo. The conference featured former Florida State Football Coach Bobby Bowden, National Credit Union Foundation Executive Director Gigi Hyland, CUNA Mutual Group CEO Bob Trunzo, and Filene Research Institute CEO Mark Meyer.

      President's 2Q Video
      The LSCU & Affiliates President/CEO Patrick La Pine provides an update from the second quarter and also looks ahead to the rest of the summer.

      Upcoming Event Deadlines
      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

      Sept. 8 Last Day to register - LSCU Fall Regulatory compliance Update - Birmingham, AL

      Sept. 9 Last Day for Early Bird Rate – LSCU Collections & Bankruptcy School – Birmingham, AL

      Sept. 10 Last Day to Register - LSCU Fall Regulatory Compliance Update - Birmingham, AL

      Sept. 23 Last Day for Early Bird Rate – LSCU OFAC/BSA Basic & Advanced School – Tallahassee, FL

      Sept. 23 Last Day for Early Bird Rate – LSCU Lending School – Birmingham, AL

      Upcoming League Events
      July 29 - SAFE Act Registration-Renewal- Compliance
      July 30 - Avoid HMDA Reporting Mistakes
      Aug. 3-6 - SE Supervisory Committee Conference
      Aug. 5 - ACH Reclamations & Garnishments
      Aug. 6 - Wire Transfer Compliance
      Aug. 7 - 6 Building Blocks for Success
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