Pennsylvania Credit Union Association
Life Is A Highway...July 27, 2010
Push For MBL Support Continues
Work continues on gathering support to ensure that the member business lending amendment, offered by Senator Mark Udall of Colorado, is included in the Small Business Bill. The amendment would increase the statutory cap on credit union loans to member businesses from 12.25% of assets to 27.5% of assets on the condition certain regulatory requirements are met.
Credit unions are asked to contact Senator Casey and Senator Specter. The message is to ask for their co-sponsorship and to ask them to weigh in with Senators Reid and McConnell expressing their support for the Udall Amendment.
The Senate is expected to remain in session through August 6, while the House plans to wrap up its session at the end of this week.
For talking points, bill information, and to contact Senators Casey and Specter, please go to: http://capwiz.com/cuna/home/.
Financial Counseling Programs: Helping Your Members, Strengthening Your Credit Union
GreenPath, Inc, the not-for-profit financial counseling company that introduced Accel Members Financial Counseling to credit unions over seven years ago, is pleased to announce the creation of new financial counseling models exclusively for credit unions and their members. For nearly 50 years, Accel by GreenPath has been working with credit unions to serve their members with the highest quality financial counseling. The new GreenPath financial counseling models provide the same high quality financial counseling found with Accel. Your members can receive assistance with:
- Personal and family budgeting
- Understanding & improving their credit report
- Money management
- Debt repayment
- Avoiding bankruptcy, foreclosure, and repossession
According to Tom Butler, Director of Business Development at GreenPath, “The new GreenPath models provide more options for credit unions to provide financial counseling and education to their members. Our broader suite of services is built around the highest quality standards designed to fit the needs of the credit union.”
Choose the program that works best for you and your members. For additional information, please contact your PCUA Account Executive. GreenPath is a Strategic Service Provider of CUNA and a partner of the Association.
New Census Data Shows Increase In Home Evictions, Downsizing
The recession and housing crisis have had an effect on the American Dream. The 2009 American Housing Survey shows that more Americans moved because they were evicted or wanted to spend less money on housing than just two years ago. (USA Today)
In 2009, when the United States suffered the worst job losses since statistics were created, 8.5 million jobs vanished. The Census survey is based on a sample of about 60,000 housing units, 45,000 of them occupied. It shows:
- The number of households that moved in the past year because they were evicted soared 127% to 191,000.
- 3.1 million households, or 18% of those who moved in the past year, said they're in a worse home, up 10% from 2007; 2.3 million, or 13%, said they're in a worse neighborhood, a 12% increase.
- In 2007, 12% of households that moved did so for a better home, and 4% moved for lower rent or maintenance. In 2009, only 10% moved to upgrade; 5% moved to reduce costs.
- Large households with five or more people inched up to 11.3 million, or 10% of occupied houses, and homes shared by two families grew slightly to 2.6 million. The number of homes that are co-owned or co-rented went up 26% to 3.4 million.
- The number of households that had more people move in went up 10% to 6 million. Some of this is due to young adults who would have their own apartment but stayed at home because of the economy and high unemployment.
- More worked from home, an 11% jump from 2007.
- Houses continue to shrink. The number of homes that are 4,000 square feet or larger dropped 14%.
Education & Training
Keeping Volunteers Informed
It’s essential that credit union volunteers stay informed of regulatory changes and safety and soundness issues. The Association’s Volunteer Development Conference, August 13-14 in Lancaster, will provide new and seasoned volunteers with the understanding and insight to perform their duties, build a better team, and stay in compliance.
Click here for more information or to register for the conference.
Invest In Training For Volunteers
New legislation, regulations, and compliance requirements will impact volunteers who serve on credit union boards and committees. While the exact requirements of the NCUA’s proposed regulation won’t be known until it passes, CUNA is helping credit unions prepare and understand the benefits of board/volunteer training by offering a new case study titled, “Investment in Training for Credit Union Volunteers Returns Value.”
Training is not a luxury — it’s an investment that yields returns in preparedness for NCUA compliance challenges, readiness for strategic planning, and increased insight into all aspects of board governance and operations.
For a copy of the case study, visit training.cuna.org/boardreq.
Chapter News
The Pittsburgh Chapter of Credit Unions held its 9th annual Golf Outing on Monday at the Westwood Golf Club. More than 100 golfers enjoyed a beautiful day on the greens and raised approximately $5,000 for the Association’s PAC, CUPAC. Thanks to everyone who supported the Pittsburgh Chapter event, especially Enterprise Car Sales, the official food and beverage sponsor.
If your chapter would like to hold a fundraiser for CUPAC, please contact Christine Seitz, ext. 5279; or Christine.seitz@pcua.coop.
National News
UIGEA relief may see committee vote today
WASHINGTON (7/27/10)—The House Financial Services Committee later today will discuss H.R. 2267, the Internet Gambling regulation, Consumer Protection, and Enforcement Act, during a markup session.
Legislation to address medical debt, shareholder protections, housing, and bonds will also be discussed during the markup session, which will begin at 10 A.M. E.T.
H.R. 2267, which would allow the U.S. Treasury to license internet gambling operators, permitting those operators to accept bets from U.S. citizens, was addressed during a public committee hearing last week. During that hearing, Discovery FCU President/CEO Ed Williams, appearing on behalf of the Credit Union National Association, urged legislators to strengthen the safe harbor rules contained in the current legislation, the Unlawful Internet Gambling Enforcement Act (UIGEA). Williams also spoke in support of the more recently proposed legislation, as H.R. 2267 would eliminate some of the compliance-related uncertainty that credit unions currently face under UIGEA.
UIGEA regulations currently require credit unions and other financial institutions to establish and implement policies and procedures to identify and block restricted internet gambling transactions, or rely on those procedures established by the payments system.
The new legislation, which was proposed by committee head Rep. Barney Frank (D-Mass.), would create new rules for online gambling operators. It is not known whether the government would license gambling operators that currently work in locations outside of the U.S., but Rep. Brad Sherman (D-Calif.) last week hinted that he would not support allowing those types of entities to "play a role where they are going to have to act as policemen."
One way that the legislation, if passed, would aid credit unions is by creating a list of approved gambling operators. This would ease the compliance burden placed on credit unions and other financial institutions and prevent financial institutions from having to do their own investigative work. Williams last week indicated that while the number of transactions that his credit union blocks due to UIGEA rules is "no more than a handful per month," the transaction blocking process does create a number of false positives that "should not have been blocked."
Corporate stabilization fund gets 'clean' 2009 audit
ALEXANDRIA, Va. (7/27/10)—The Temporary Corporate Credit Union Stabilization Fund (TCCUSF) received an unqualified or "clean" audit opinion with no deficiencies noted, according to an National Credit Union Administration (NCUA) announcement Monday.
Citing a report from KPMG LLP, the independent firm retained to conduct the audit, the NCUA Chairman Debbie Matz said the audit results represent "an important validation of the soundness of this essential NCUA role."
"In these volatile and uncertain times, it is very positive and reassuring for credit unions that the Stabilization Fund, working in concert with other NCUA funds, has received this clean bill of health on its financial reporting and is well-positioned to safeguard the corporate system," Matz said.
Last month, KPGM also gave the National Credit Union Share Insurance Fund (NCUSIF) a "clean" audit report, with auditors also certifying the "financial accuracy" of the NCUA's operating fund, its community development revolving loan fund, and its central liquidity facility.
In its report on the TCCUSF, KPMG wrote, "(I)n our opinion, the financial statements referred to...present fairly, in all material respects, the financial position (of the fund) as of December 31, 2009, and its net costs, changes in net position, and budgetary resources for the period from May 20, 2009 (inception) to December 31, 2009 in conformity with U.S. generally accepted accounting principles."
The TCCUSF was created in May 2009 by the U.S. Congress to accrue corporate credit union system losses, and over time, to assess the credit union system for the recovery of such expenses. The fund has access to $6 billion in U.S. Treasury borrowing authority, which is shared with the NCUSIF.
After reviewing the auditors report, Credit Union National Association Chief Economist Bill Hampel said that while the audited financial statements offer no new information, credit unions can find the fund's unqualified audit reassuring.
The projected total cost of the corporate stabilization effort remains approximately $7.5 billion, of which $1 billion is the previous capital injection into US Central, and $6.5 billion is the accounting cost of guaranteeing all credit union non-capital deposits in corporate credit unions, Hampel said.
"These accounting costs are NCUA's estimates of the ultimate actual costs of corporate stabilization. After all is said and done, credit unions will have to pay the actual costs that are eventually incurred as a result of troubled assets held by some corporate credit unions. This year's 13.4 basis point assessment raised $1 billion toward the final cost. In the next three to four years, we'll learn more about what the actual costs will be," Hampel said.
He added that it would not be unlikely to see assessments in the neighborhood of 13 basis points for the next couple of years, followed by adjustments, either increases or decreases, in the last few years of the stabilization as actual losses become better known.
NCUA release
NCUA stabilization fund report
NCUA Inspector General’s website
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