CUNA Offers Mixed Review of NCUA's Draft Underserved Regulation Change
NCUA should permanently grandfather all existing low-income credit unions, not just for five years as the agency proposes, CUNA Deputy General Counsel Mary Mitchell Dunn wrote.
"While we do not think a significant number of credit unions that are currently low income would fail to qualify under the new definition, we are aware that there are a limited number of those that would," she added.
Dunn also suggested adding a waiver process so credit unions can receive low-income status if they serve areas or individuals that need access to financial services but might not technically be classified as low income.
CUNA also urged the agency to put information on its Web site that would help credit unions assemble information required to complete their applications for low-income designation. The trade association encouraged NCUA to designate state-chartered federally insured credit unions as low-income and recommended that the federal agency work with state regulators to coordinate the practical implications of those designations.
The NCUA proposed the rule change after its Outreach Task Force decided on recommendations to help the agency encourage credit unions do more to serve the underserved. The task force was the result of criticisms of the lack of credit union data in this area by the Government Accountability Office, Congress' investigative arm.
NCUA and IRS Team Up on a How-To
Video for CUs Offering Tax Assistance
WASHINGTON -- NCUA and the IRA are working together to produce a how-to video for credit unions interested in setting up tax assistance programs for low- and moderate-income members.
The federal agencies are working on the video, which explains the steps required to make available the IRS' volunteer income tax assistance program at a financial institution. VITA programs are free to consumers. The IRS provides the training for those volunteering tax assistance.
"VITA services are rapidly becoming intrinsic to overall credit union efforts to assist low-income members, and the video will provide practical, real-world information for credit unions interested in creating a program suited for their membership," said NCUA Board Member Gigi Hyland.
The video, which will also feature a representative of North Side Community Federal Credit Union in Chicago, will be called "Establishing a VITA Site: How and Why." It will also discuss how credit unions can apply for grants from the IRS' VITA Grant Program to fund start up. It will be mailed to available to small credit unions and posted on NCUA's The Resource Connection Web site (www.ncua.gov) by Aug. 1.
NCUA: Gift Cards Electronic Service
An Electronic Financial ServiceWASHINGTON -- Federal credit unions can receive payments for gift cards and track payments as long as the issuer is a credit union member, according to an opinion letter by the NCUA, in response to a query from Texas Tech Federal Credit Union in Lubbock.
Texas Tech FCU wants to be able to set up a business arrangement with Texas Tech's athletic department for managing the department's gift card. The information about gift cards would be on the department's site and if someone wants to buy a card they would be transferred to the Texas Tech FCU for the purchase.
The proposal "is permissible under the provision in NCUA's incidental powers regulation permitting an FCU to provide electronic financial services," according to a letter from NCUA Associate General Counsel Sheila A. Albin to Ellen Hein and Chris Hutson, the CEO and chief financial officer, respectively, of Texas Tech FCU.
Johnson Cites Reforms and Challenges
During Her Tenure as NUCA Chairman
WASHINGTON -- Keeping the interests of credit union members at the forefront of all actions--not just talking about it--was the hallmark of her six years at NCUA, outgoing Chairman JoAnn Johnson said in a statement.
She said the greatest challenges of her tenure included working on the NCUA's responses to additional congressional scrutiny of credit unions' tax-exempt status, the emergence of what she called the "cottage industry" of efforts to convert credit unions into for-profit banks, and the housing and credit crises.
According to Johnson, the board has done a careful job of balancing competing interests. "I have had the privilege to shape a federal regulatory regime for credit unions that is stringent enough to maintain an unmatched safety and soundness record, and flexible enough to promote innovation in delivering up-to-date financial services for consumers," Johnson wrote.
Johnson, a former Iowa state senator and teacher, is scheduled to leave her position later this month when former Illinois financial services regulator Michael E. Fryzel is sworn in. She has been on the NCUA board since 2002 and its chairman since 2004. Johnson was appointed by President Bush, on whose campaign she worked in Iowa in 2000.