Comment! NCUA's Proposal on Risk-Based Capital
We mentioned in our previous Advocate that NCUA is seeking comments on a proposal regarding risk-based capital requirements under its prompt corrective action rules. We want to reiterate that this proposal is the most important proposal NCUA has released in years. If implemented, credit unions would be required to hold as much as $7.3 billion in additional capital, despite that the multi-billion-dollar price tag of additional capital is for a system that already successfully withstood the worst financial crisis in 80 years.
We are asking all Cornerstone credit unions to take action through CUNA’s grassroots website. To access CUNA's Grassroots Website, please click here.
A detailed summary of the Rule may be accessed here. Again, the proposal would:
Cover credit unions with assets over $50 million (many of the almost 300 credit unions with between $40 million and $50 million in assets will exceed the $50 million level in just a few years).
Restructure NCUA's current PCA regulation to involve calculation of a capital-to-risk assets ratio (analogous to Basel III for community banks, although the risk weights would be substantially different).
Require a well-capitalized credit union to maintain a 7% net worth ratio (unchanged from the current PCA system) and a new 10.5% risk-based capital ratio.
Change many of the effective risk weights for most of NCUA's current asset classifications.
Set higher risk weights and higher capital requirements for credit unions with higher concentrations of assets in real estate loans, member business loans, longer-term investments, and some other assets.
Authorize the agency to require even higher capital on a case-by-case basis.
Set further restrictions on the ability of a credit union to pay dividends.
NCUA has produced a calculator to help credit unions demine how the proposal would affect their net worth. CUNA has produced its own calculator, which differs from NCUA's in two important aspects: it lets credit unions consider changes in their balance sheets, and it is only open for use by CUNA-affiliated credit unions.
Please don't forget to share any comments you make with Cornerstone’s regulatory compliance counsel Suzanne Yashewski at email@example.com.
DontTaxTuesday Grassroots Event
By now you've heard that tomorrow is our third "Don't Tax Tuesday" event, using social media channels to send Congress the loud and clear message: "Don't Tax My Credit Union!" With tax reform still high on the congressional agenda and while many our credit union leaders are in Washington, DC, at the CUNA Governmental Affairs Conference, this is a great time to leverage that message.
We encourage you to join us. Get creative and get engaged! Share and post your original content, including photos and videos, or use the suggested tweets below. You can even send the message the "old-fashioned" way, via email. Using our suggested hashtags will facilitate everyone's ability to participate in social media and increases the overall impact of our credit union message. DontTaxTuesday is an all-day affair, so be ready to jump in with both feet.
The following handles and hashtags will work across social media channels. Specifically, Twitter, Google+, Pinterest, Instagram, Vine, LinkedIn, and Facebook.
#Crash the GAC14
Below are your state legislators' Twitter handles, as well as the handles for the Senate Finance Committee leadership.
Senate Finance Committee Leadership:
Ron Wyden: @RonWyden
Orrin Hatch: @OrrinHatch
Senate Finance Committee: @SenateFinance
Sen. John Boozman: @JohnBoozman
Sen. Mark Pryor: @SenMarkPryor
Rep. Rick Crawford: @RepRickCrawford
Rep. Tim Griffin: @RepTimGriffin
Rep. Steve Womack: @Rep_SteveWomack
Rep. Tom Cotton: @RepTomCotton
Sen. Tom Coburn: @TomCoburn
Sen. Jim Inhofe: @JimInhofe
Rep. Frank Lucas: @RepFrankLucas
Rep. Tom Cole: @TomColeOK04
Rep. James Lankford: @RepLankford
Rep. Jim Bridenstine: @RepJBridenstine
Rep. Markwayne Mullin: @RepMullin
Sen. John Cornyn: @JohnCornyn
Sen. Ted Cruz: @SenTedCruz
Rep. Joe Barton: @RepJoeBarton
Rep. Kevin Brady: @RepKevinBrady
Rep. Michael Burgess: @MichaelCBurgess
Rep. John Culberson: @CongCulberson
Rep. John Carter: @JudgeCarter
Rep. Henry Cuellar: @RepCuellar
Rep. Lloyd Doggett: @RepLloydDoggett
Rep. Blake Farenthold: @farenthold
Rep. Bill Flores: @RepBillFlores
Rep. Kay Granger: @RepKayGranger
Rep. Gene Green: @RepGeneGreen
Rep. Louie Gohmert: @RepLouieGohmert
Rep. Al Green: @RepAlGreen
Rep. Ralph Hall: @RalphHallPress
Rep. Ruben Hinojosa: @USRepRHinojosa
Rep. Jeb Hensarling: @RepHensarling
Rep. Sheila Jackson Lee: @JacksonLeeTX18
Rep. Eddie Bernice Johnson: @RepEBJ
Rep. Sam Johnson: @SamsPressShop
Rep. Mike McCaul: @McCaulPressShop
Rep. Kenny Marchant: @RepKenMarchant
Rep. Randy Neugebauer: @RandyNeugebauer
Rep. Pete Olson: @OlsonPressShop
Rep. Ted Poe: @JudgeTedPoe
Rep. Pete Sessions: @PeteSessions
Rep. Lamar Smith: @LamarSmithTX21
Rep. Mac Thornberry: @MacTXPress
Rep. Joaguin Castro: @JoaquinCastroTX
Rep. Pete Gallego: @RepPeteGallego
Rep. Marc Veasey: @RepVeasey
Rep. Filemon Vela: @RepFilemonVela
Rep. Randy Weber: @TXRandy14
Rep. Roger Williams: @RepRWilliams
Sample tweets you can model:
A tax on credit unions is a tax on me! #DontTaxMyCU @UniteforGood
Taxing credit unions will put them out of biz. #DontTaxMyCU @OrrinHatch
Follow this link for more tweet ideas: Tweet!
If you're not already following Cornerstone Credit Union League (@Cornerstone_CUL) on Twitter, go to www.twitter.com/Cornerstone_CUL.
Want to know more about CUNA's award-winning "Don't Tax My Credit Union" campaign? Check out CUNA's dedicated site at www.DontTaxMyCreditUnion.org.
After 12-Year Hiatus, NE Arkansas Chapter Reignites
Sandy Wood is the busy CEO of White County FCU in Searcy, Arkansas. She’s part of the Northeast Arkansas chapter of credit unions. The only problem was, due to leadership changes and a little thing called geography (the distance between some credit unions in this region is up to 200 miles), the chapter had been dormant for 12-14 years! But Wood attended the Cornerstone Chapter Leader’s conference in January, and that gave her a new outlook on what an active chapter could do.
Wood said that attending the Chapter Leader’s conference was a great experience and one thing really stood out for her: the brainstorming session where participants had 180 minutes to come up with 70 great ideas. Though many of the ideas that came out of the brainstorming applied to larger credit unions and chapters whose resources are less limited, Wood recalls, “It really got me thinking and generated lots of ideas that a smaller credit union like mine could use.”
Determined to overcome the obstacles that had prevented chapter gatherings in the past, Wood planned and organized a meeting for the three credit unions in her chapter, and she invited estate planner Timothy Russell to come and speak about wills, trusts, probate, etc., as they relate to scenarios that credit unions might face. Arkansas Credit Union Association President Reta Kahley and Education and Events Director Skeeter Brosius joined the three credit unions involved, White County FCU, Natural State FCU, and Northeast Arkansas FCU.
Now that they have some momentum behind them, the Northeast Arkansas chapter is planning to meet quarterly, alternating hosting the responsibilities. One of the best things to come out of their inaugural chapter meeting was the connection. Wood said it was a relief to discover they could share resources between them, that building rapport was so easy and welcomed, and that their credit union bond quickly strengthened.
So many benefits to gained from chapter meetings, we're delighted the Northeast Arkansas Chapter was able to blaze a new trail for themselves and, ultimately, their members.
Webb to Assume Helm at CUAO
Gary Jones, President of the Credit Union Association of Oklahoma, has long been a respected leader for Oklahoma credit unions, and we've known for some time that he has been looking forward to retirement. That retirement begins in March 31, and we want to thank him for his service with the Cornerstone, especially as we transitioned from one state to a three-state association, and wish him well as he starts a new chapter of his life.
We're delighted to welcome Nate Webb as the new president of the Credit Union Association of Oklahoma, and he will take the month of March to transition into the position with Gary's help.
Nate Webb knows credit unions. He has been talking about the credit union difference with the elected officials in both Oklahoma and Washington for the past three years. As a partner with Capitol Gains, LLC, a lobbying firm in Oklahoma City that represented the league for many years, he was retained to represent credit unions before lawmakers and regulators.
Nate was chief of staff in the office of then Congresswoman (and now Governor) Mary Fallin from January 2007 to February 2011. From October 2003 to December 2006, he served as her chief of staff when Fallin was Lieutenant Governor. Nate graduated from the University of Central Oklahoma, majoring in journalism and political science. Also, from June 1975 to August 1979, Nate served in the United States Navy.
With committee deadlines looming, both chambers of the legislature have been focused primarily on committee work. Senate bills assigned to a single committee will die if not heard by close of business today. Following are the priority bills we're watching:
HB2506 (McDaniel in the House/Newberry in the Senate) a credit union request bill addressing Small Claims Court has passed committee and has been placed on the House floor agenda. It is expected to be heard early next week. The whip count indicates easy passage.
SB0582 (Brinkley in the Senate/Quinn in the House) a bill to improve the system for notification to lienholders is still a work in progress. Proposed language has been delivered to the author, and we will begin negotiations with the opposition.
SB2080 – Requires state agencies, boards, and commissions to make public their memorandums of understanding. State Banking Commissioner Mick Thompson believes this would potentially create confusion among the public and therefore be detrimental to financial institutions. At the commissioner’s request, the Credit Union Association of Oklahoma is joining forces with the OBA to oppose this bill.
HB2620 – A bill to prevent municipalities to charge fees to lienholders of abandoned property has passed committee. Credit Union Association of Oklahoma has joined forces with several other entities in actively lobbying on behalf of this bill.
El Paso Chapter ROARS
Recently, the El Paso Chapter held what we consider a model chapter meeting, focusing on a number of key areas, including advocacy. This meeting was unique in the sense that they have not only a legislative representative on their chapter board, but an entire CU:ROAR advocacy team.
The evening began with a one-hour CU:ROAR orientation for the benefit of local CEOs and other advocacy leaders. The orientation provided an overview of the CU:ROAR program, how credit unions of different asset ranges can get involved, and what chapters and credit unions can do at the local level to get politically engaged.
CEOs in attendance included Bob Peterson (One Source FCU), Karl Murphy (FirstLight FCU), and Oscar Carbajal (Tip of Texas FCU). In addition, representatives from Security Service FCU, GECU, El Paso Area Teachers FCU, and Mountain Star FCU were in attendance.
The “regular” chapter meeting was held after the orientation. During a dinner with over 80 attendees, the chapter president, Derrick Aquilar, introduced the Chapter’s own CU:ROAR team, followed by an icebreaker exercise about important advocacy terms.
Cornerstone's April Mobley conducted an Advocacy 101 presentation. We want to congratulate the following El Paso Chapter credit unions who signed up for the CU:ROAR program:
One Source FCU
Tip of Texas FCU
Mountain Star FCU
El Paso Area Teachers FCU