NWCUA Regulatory Advocacy Update: Support for Portland’s Responsible Banking Resolution
May 3, 2012
May 3, 2012
Association Supports City of Portland’s Responsible Banking Resolution
In February, Portland Mayor Sam Adams released a resolution on “responsible banking” that would allow the city to invest its funds in ways that support the local economy. The resolution focuses on increasing market competition, supporting local institutions such as credit unions, and promoting institutions that make a difference in their community.
The resolution specifically highlights the value of credit unions and the city’s support for and plans to participate in the Oregon public funds program.
“While we overwhelmingly support the mayor’s resolution, we do have two areas of concerns with the language,” said Northwest Credit Union Association Director of Regulatory Advocacy Jaycee Winn. “First, the resolution highlights as a means for selection of eligible institutions a need to ‘consider community reinvestment criteria.’ Because credit unions are not subject to the Community Reinvestment Act (CRA), we asked that should the city establish benchmarks for community involvement for credit unions, that they not be based on CRA requirements.”
By virtue of their established membership requirements, credit unions already offer their products and services to their local communities—concerns that were the impetus for CRA—and are therefore exempt from such standards. Simply relying on CRA compliance or reports would unfairly disadvantage credit unions.
The resolution also highlights the fact that banks are “tax-paying institutions and currently employ over 8,000 people in the Portland metropolitan area alone.” While credit unions are tax-exempt institutions, they pay significant levels of local taxes, including payroll taxes and property taxes, and have an important footprint within Portland. Portland-based credit unions employ over 1,000 people. Without diminishing the role that other financial institutions play in Portland, Winn said that the Association stressed that credit unions are a major driver of industry.
“We are pleased the city is taking such a proactive role and appreciate its efforts,” Winn said. “We appreciate the effort of the city in putting together this resolution and the groundbreaking steps being taken to help increase competition and reward community-minded institutions. We believe this is a good move for the city, its citizens, local financial institutions, and the people of Oregon.”
Read the Association’s full letter here.
Fed Releases 2011 Interchange Study
On May 1, the Federal Reserve issued the results of its first promised study on the impact of interchange regulations on fees paid to card issuers during 2011.
Issuers over $10 billion, who are subject to the limits imposed by the “Durbin Amendment,” saw interchange fees fall from 50 cents in the first three quarters of 2011 to 24 cents after the cap was imposed.
For exempt institutions, those under $10 billion in assets, rates were similar to 2009 rates of 43 cents overall for PIN and signature transactions. Fees are down from 45 cents during the first three quarters of 2011.
While the impact on exempt issuers seems to be minimal so far, it will take more time to be sure how the Durbin Amendment will impact small issuers, as a major concern is what the cap will do to market forces in driving down price.
“This will be an annual survey performed by the Fed,” Winn said. “When the next study is released, it will be interesting to see if or how network exclusivity provisions impact both exempt and nonexempt issuers.”
Read the full survey here.
NCUA Offers Webinar on Credit Union Online Upgrade
The National Credit Union Administration (NCUA) will be launching a new version of CU Online at the end of the month. In preparation, the NCUA is offering a webinar to go over many of these new changes, including:
- Instant warnings to prevent data-entry errors and omissions and to identify inconsistencies with historical data;
- Real-time calculations and edits without a need to save changes;
- Help tips and instructions incorporated into each profile section; and
- Expanded read-only access capabilities for credit union staff and board directors.
According to the NCUA, credit unions using CU Online will need to download and install Microsoft Silverlight. During the upgrade, the NCUA will also eliminate paper notices each call report cycle to credit unions using CU Online. As part of the greeNCUA initiative, the switch to electronic notices from NCUA Express for CU Online will reduce the NCUA’s paper and postage costs by more than $20,000 annually.
The webinar will be held May 15 at 11 a.m. PST. Register for the event here.
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 email@example.com, or at 800.995.9064 x209.