NWCUA Regulatory Advocacy Update
October 12, 2011
October 13, 2011
NWCUA Comments on Interchange Fraud Adjustment
The Northwest Credit Union Association (NWCUA) recently filed a comment letter on the Federal Reserve Board’s proposed one-cent adjustment to debit interchange fees for large issuers not exempted from the Durbin interchange amendment. In its letter, the NWCUA again expressed dismay at the board’s plan as implemented and voiced concerns about the downward pressure this regulation will have on all debit income, including that of exempted issuers.
“The Association strongly objects to the Board’s interpretation of Congressional intent when adopting changes to the debit interchange fee structure,” the letter states. “As witnessed in other countries, such government mandates do not result in lower prices for consumers.”
The NWCUA took the opportunity to remind the board of its commitment to closely monitoring the two-tier fee system.
“Even the Board has expressed concern about the viability of a two-tier system. The Association supports the efforts of the Board to put regular monitoring of this two-tier system in place and trusts that the Board will take swift action should the system established to protect the interchange income of small issuers begin to erode or become less than effective.”
The comment also highlighted the fact that a one-cent adjustment does not begin to cover fraud prevention costs and that the board should continue to study these costs in order to implement a more informed adjustment. The Association called attention to the lack of change in retail prices in anticipation of decreased costs as promised by retailers.
The Association will remain vigilant on this issue to help monitor the impact of this misguided rule on credit unions.
As Urged by NWCUA, NCUA to Address Troubled Debt Restructuring
After repeatedly meeting with the National Credit Union Administration (NCUA) on the issue, the NWCUA is pleased to see that the NCUA will soon be taking another look at accounting for troubled debt restructurings (TDR). The NWCUA has raised this issue with the NCUA in an effort to help them truly understand the difficulties and ambiguities for credit unions when addressing loan modifications and TDRs specifically.
Credit unions expressed concerns that the complicated accounting for modified mortgages made them difficult to implement and diminished the ability to develop creative solutions for struggling members—far from the credit union mission. It is time for the NCUA to clarify these rules and ensure that credit unions (and examiners) fully understand how to account for TDRs.
The Association is pleased to see this issue back at the forefront at the NCUA and will continue to advocate on this issue to ensure adoption of a more straightforward and practical approach.
NWCUA Monitors NCUA as 2012 Budget Changes Loom
The NCUA will be taking up its 2012 budget in the coming weeks. In 2011, the NWCUA strongly objected to the NCUA’s 12 percent budget increase from 2010 levels—a total of a 27.4 percent increase from 2009. As other federal agencies are finding innovative ways to cut costs, Association leadership urged the NCUA to do the same and expressed shock at the increase.
With the NCUA being funded entirely by credit unions and the 25-basis-point assessment from the stabilization fund, credit unions cannot continue to bear the load. While the NCUA adjusted their budget down by $2 million mid-year, the NWCUA continues to advocate for reductions, taking into account the increasing pressure on credit union budgets.
The NCUA has not provided any forecasting of their predicted budget outlays, but the NWCUA stands ready to address the issue should it again be concerning.
Don’t forget to Register for the Upcoming Fall Governmental Affairs Forum on November 2nd!
The Governmental Affairs Forum is an opportunity for strategic discussion of current legislative and regulatory issues with those who have their finger on the pulse. This forum provides attendees the invaluable opportunity to have an open and candid dialogue with regulators.
Your participation gives you a direct line to regulators and helps the NWCUA understand issues relevant to your credit union. It also allows Association staff to better communicate threats, opportunities, and concerns that may affect your credit union.
What: Fall Governmental Affairs Forum
When: Nov. 2, 12:30–3:30 p.m.
Where: NWCUA Training Room, Federal Way, Wash.
Oct. 21 Briefing for Oregon Credit Unions on Public Funds Law
On Oct. 21, DCBS is hosting their annual briefing for Oregon state-chartered credit unions. At the end of that meeting, representatives from the Treasurer’s office will be coming in to provide an introduction to the new public funds law, including an overview of timeline, participation requirements, and next steps for both state and federally chartered credit unions.
We hope that all interested Oregon credit unions will be able to participate in this briefing either in person or via teleconference. Federal charter credit unions are welcome to attend in person or by phone.
Lunch will be provided, so the NWCUA asks that you RSVP if you or someone from your credit union plans to attend so as to keep an accurate count.
What: Credit Union Briefing on Public Funds Program
When: 12:15-1:15 p.m.
Where: DCBS, Labor & Industries Building, 350 Winter St NE, Room 260, Salem
(Call-in details will be forwarded at a later date)
Click here to Register
The NWCUA Regulatory Advocacy team works with state and federal regulators to help reduce the regulatory burden on credit unions and protect the credit union movement. The Association encourages members to participate in the regulatory process. If you have any questions on these or any regulatory issues, please contact Director of Regulatory Advocacy Jaycee Winn at firstname.lastname@example.org, or at 800.995.9064 x209.