Regulation Z: Credit Counseling Required

Regulation Z Revisited:
Credit Counseling Required?
Provided by:
Chad M. Gentry, Executive Director
Community Credit Counseling Services

Here are a few facts about Regulation Z that you may find interesting:

6.5 ft – The height of the banking regulations changes from 2010 if printed on single sheets of paper and stacked vertically.
270  – The number of pages in Regulation Z Part II issued by the Federal Reserve.  (Read it here:
27 – The number of pages in the summary of coming changes issued in 2009 by CUNA! (Read it here:
74 –The number of times Credit Counseling is referenced throughout the regulation.

Given this information, you can start to understand why the credit union industry is feeling the pressure regarding the increased costs of the new regulatory environment.   One important measure implemented in Regulation Z is that if you offer your members credit cards (open ended lines of credit), then you are required to provide a 1-800# on card statements in order to connect card holders with at least three credit counseling resources.

How does this 1-800# translate to your credit union from a compliance and cost standpoint?

As of February 2010 your members’ credit card statements are required to provide a contact number to a minimum of three credit counseling resources. These credit counseling resources must be non-profit 501(c)(3) debt management and credit counseling agencies.  A qualified agency must:

  • Be on the Federal Trustee’s approved list,
  • Provide services in the footprint where your clients live,
  • Provide qualified and certified counselors,
  • Provide adequate provisions for safe keeping of client funds,
  • Make all services available to the public regardless of ability to pay,
  • Provide trained counselors who receive no commissions.


To make matters even more complicated, the 1-800# itself must fulfill additional qualifications:

  • Must provide three credit counseling options that are approved by United States Trustee,
  • Must provide websites as an access point to these credit counseling agencies,
  • Must provide counselors in the foot print where the member is located,
  • Must provide a resource in at least one language other than English.

Many credit unions attempt to fulfill these requirements by offering the phone number to their own customer service department where they have trained credit union staff filter calls and provide resources for credit counseling.  Unfortunately, while this may be cost effective in the short term, it is NOT in compliance with the guidelines. 

The following non-profit credit counseling services are offered to Mountain West Credit Union Association Members:

  • Community Credit Counseling Services is offering there service to Association members throughout Colorado.   Contact Chad M. Gentry at 303.233.2773 for more information.
  • Take Charge America is a resource available through REAL Solutions.  Contact Paul Nichols at Take Charge America at (623) 266-6286 for more information.

  • GreenPath Debt Solutions is a credit counseling service available through CUNA Strategic Services.  Contact or 1.866.809.8913 for more information.  (In Wyoming was previously known as: Consumer Credit Counseling Service of Northern Colorado and Southeast Wyoming)


2012 Western States Volunteers’ Conference: The Game Changer

Leading your credit union is a labor of love but challenges in regulations, laws, and the economy make it difficult to focus on what you love most about your volunteer role.  It’s time to change the way this game is played.  The 2012 Western States Volunteers’ Conference delivers you simple and effective ideas that will bring results to your credit union.  Learn tactics to break out of the board room and bring leadership back to your role, despite the day-to-day hurdles you face. 

The Western States Volunteers’ Conference is brought to you by the Credit Union Leagues of Arizona, California, Colorado, Hawaii, Idaho, Illinois, Minnesota, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Oregon, Texas, Utah, Washington and Wyoming.  In 2012, the conference is being held February 12-14 at Treasure Island in Las Vegas, NV.

This conference is specifically geared toward

• Board members

• Supervisory committee members

• Credit committee members

• All interested volunteers CEOs, managers and significant others are also invited to attend.

E-mail Shay Jacobs at to have a conference brochure sent to you, or visit

Arizona’s Political Races

Arizona’s Politial Races: A Guide For Your Credit Union

Last month, the Arizona Independent Redistricting Commission approved a draft version for the new 2012 U.S. congressional lines in Arizona. As you know, new congressional lines are determined every 10 years based upon the United States Census.  Beginning in 2012, Arizona will also gain an additional congressional district (9 in total) as a result of population growth. Although the district map that was released is not final, the draft version will likely only face minor changes from here on out.

According to “The Cook Report” the recommendations by the commission would set the stage for 4 relatively safe Republican districts, 3 relatively safe Democratic Districts and 2 toss up districts. Here is a breakdown of how each district could shake out.  

For a full breakdown of Arizona’s nine Congressional districts

AZ-01 is currently held by freshman lawmaker Dr. Paul Gosar (R), who defeated Ann Kirkpatrick (D) during the 2010 election. The district has always been considered competitive, and the new map would make it even more of a tossup. As a result, democrats see this as a high possible pick up for them in 2012, especially with Kirkpatrick looking to regain her seat. 

AZ-02 is currently held by Congresswoman Gabrielle Giffords (D). The new lines would give an edge to the democrats, but maintains a level of competitiveness for a possible Republican victory.  However, any potential challengers for the seat will wait to see if Giffords decides to run reelection.  Most likely, Democrats or Republicans will not challenge her if she does decide to run in 2012.

AZ-03 is currently held by Congressman Raul Grijalva (D). The new map would maintain an extremely safe democratic district for the Congressman. Grijalva is a strong friend of credit unions, that has cosponsored every credit union MBL piece of legislation.

AZ-04 would be a heavily Republican district with no incumbent.  The conservative district is currently shared by Trent Franks (R), and Paul Gosar (R).  Potential candidates could include Pinal County Sheriff Paul Babeu, state Senator Ron Gould, or even Paul Gosar who may move into the district to represent a more conservative seat. 

AZ-05 is another open seat that encompasses much of the district that will be vacated by Rep. Jeff Flake (R), who is running for a U.S. Senate seat.  The district will remain a safe Republican district, but the 2012 primary is shaping up as one of the closest in the state.   The lines would pin former AZ Speaker of the House Kirk Adams against former Congressman Matt Salmon.  Adams who has the backing of Sen. Jon Kyl, was the Arizona Credit Union League’s Legislator of the Year in 2008.  Salmon is backed by Maricopa County Sherriff Joe Arpaio.

AZ-06 would generate one of the more unique situations for the Congressional lines.  The district is considered safe Republican, but would likely pin freshman representatives, Ben Quayle (R) and David Schweikert (R) against each other in a primary showdown.  Also, neither of the incumbent Congressmen currently live in the district.  However, it is likely that the lines will be revised to include Quayle’s house, while Schweikert has already announced his intention to run for the district and has even bought a house in anticipation of the new congressional map.    

AZ-07 is the district that is currently held by Congressman Ed Pastor (D).  It is the district that would be changed the least, and remains the safest Democratic district in Arizona.  

AZ-08 is the district that is currently represented by Congressman Trent Franks (R).  As a result of the population growth in his current district, much of his district was shed off to others.  Despite the geographical shrinking, Frank’s district would remain among the most conservative in the state. 

AZ-09 would be a new district and possibly the most competitive districts in the state.  Former Congressman Harry Mitchell (D) would be seen a frontrunner if he decided to return to politics.  Other Democrats that are mulling a bid would be state Sen. Kyrsten Sinema and attorney Jon Hulburd.   On the Republican side, Tempe Mayor Hugh Hallman would be seen as a top contender to appeal to this moderate new district. 

No matter the final outcome, redistricting will certainly reshape the political landscape in Arizona’s Congressional races (not to mention the 30 legislative districts that are also getting redrawn).   However, the other wildcard in 2012 is the open Senate seat that will be vacated by U.S. Senator Jon Kyl.   

The Arizona Senate race will be the first open seat in Arizona for an US Senate in 18 years.   Despite the high profile seat, only 3 candidates stand out as potential contenders for the seat.  As it stands now, Republican Congressman Jeff Flake is considered the front runner in the race.  The biggest challenge for Flake could be Wil Cardon, a political newcomer with deep pockets as an investment banker.  Other potential contenders that have yet to make a decision include: Sheriff Joe Arpio and former AZ Attorney General Grant Woods.  The former Democratic Party Chairman Don Bivens is the lone Democratic to announce his candidacy. However, former US Surgeon General Richard Carmona has been courted by President Obama to run for the seat.  Other potential democrats could
include Representatives Ed Pastor and Gabrielle Giffords.

Provided by: Austin De Bey, VP of Legislative Affairs

Treasury Direct

Resources Available to Help Inform Customers About Ending Over-the-Counter Sales of Paper U.S. Savings Bonds

The U.S. Department of the Treasury announced it will end over-the-counter (OTC) sales of paper savings bonds on December 31, 2011. While paper bonds will no longer be sold at financial institutions, electronic savings bonds remain available for purchase through TreasuryDirect, a secure web-based system operated by the Bureau of the Public Debt.

The Treasury Department is offering a free toolkit to help financial institutions easily communicate the change to customers about the end of OTC sales of paper U.S. Savings Bonds. The toolkit contains:

• fliers for customers
• short messages for account statements
• frequently asked questions (FAQ) for employees
• web banners
• an article for employee newsletters or Intranet

All can be downloaded at

In July, the Treasury Department announced the December 31 end of OTC sales of paper savings bonds, including sales through financial institutions and applications mailed directly to the Federal Reserve Bank by customers. Although paper savings bonds sales are being discontinued, electronic Series EE and Series I Savings Bonds remain available for purchase at

Financial institutions are asked to educate their customers about the change and to continue redeeming the more than 670 million paper savings bonds worth $181 billion that are currently in the hands of the public.  Discontinuing paper savings bond sales is expected to save taxpayers an estimated $70 million over the next five years. 

For more information, visit



Congratulation to all our Award Winners!

The 4th Annual Star Gala Awards

• Denver Community Credit Union – Community Impact Award Recipient
• Sooper Credit Union – Community Impact Award Runner Up
• Liz Luce, First Education Federal Credit Union – Volunteer of the Year, Wyoming
• Christine McClatchey, College Credit Union – Volunteer of the Year, Colorado
• Steve Higginson, Reliant Federal Credit Union – Professional of the Year, Wyoming
• Mike Williams, Colorado Credit Union – Professional of the Year, Colorado
See photos and videos

The HOPE Award: Helping Our People Every Day

• Arizona’s Statewide Recipient Camille Chrzanowski (Pyramid FCU)
• Pattie Rowe (Arizona State CU)
• Lisa Pattern (Altier CU)
• Angela Zarzayczny (Hughes FCU)
• Tallen Rand(TruWest CU)

The Dora Maxwell Social Responsibility Recognition Award is named after the credit union Pioneer, Dora Maxwell and given to a credit union or chapter for it social responsibility projects within the community.  Congratulations to this year’s recipients:

Space Age Federal Credit Union: National First Place Award

• $200-500 Million
      Credit Union West: Honorable Mention
      First Credit Union: Honorable Mention
      Tucson Federal Credit Union: Honorable Mention
      Arizona Central Credit union: Second Place 
      Pima Federal Credit Union: First Place

• $1 Billion plus

     Arizona State Credit Union: Second Place 
     Desert Schools Federal Credit Union: First Place

• $100-200 Million 
     Space Age Federal Credit Union  First Place

The Louise Herring Award honors credit unions for programs that benefit their members by putting philosophy in action.  Congratulations to this year’s recipients:

Desert Schools Federal Credit Union: National Honorable Mention

• $1 Billion plus
     Arizona State Credit Union: Second Place
     Desert Schools Federal Credit Union: First Place 

The Desjardin Award is named in honor of the founder of the North American credit union movement, Alphonse Desjardins and recognizes youth and adult literacy programs.  Congratulations to this year’s recipients:

• $200-500 Million

     Tucson Federal Credit Union:  Second Place 
     Credit Union West:  First Place Adult Award
     Pima Federal Credit Union:  First Place Youth Award

• $50-150 Million
      Arapahoe Credit Union  First Place, Desjardins, Youth Award
• $150-500 Million
      Denver Community Credit Union First Place,   Desjardins, Adult Award

*All First Place statewide award winners were sent to the Credit Union National Association for National Judging and will be presented at the March 2012 Governmental Affairs Conference.

Update on IRS Notices Regarding Credit Unions’ Tax-Exempt Status

Last Week, Bill Cheney sent a letter to the Internal Revenue Service urging the agency to take immediate action to correct a very serious error that has resulted in the purported revocation of the tax-exempt status of a number of credit unions that have been diligently filing Form 990 information returns for years.  Credit unions in several states have received notices from the IRS’ Exempt Organization Division that they are no longer considered tax exempt organizations.  CUNA legal staff members have been on top of these developments and are pushing the IRS to correct its error as soon as possible.

Credit Union Industry Financials Remain Relatively Stable in Second Quarter

Key financial indicators generally show stabilization and continued improvement in the second quarter of 2011, while economic conditions persist in posing challenges for the system, according to Call Reports submitted by the nation’s 7,239 federally insured credit unions to the National Credit Union Administration (NCUA).

“The second quarter financials demonstrate the continued resilience of the credit union industry,” NCUA Board Chairman Debbie Matz said. “Specifically, I am pleased to see that net income has risen significantly since 2010, and that lending has grown for the first time in four quarters.  NCUA’s 2010 rule providing for short-term or payday loan alternatives has contributed to the recent growth. In the latest quarter, credit unions made 52 percent more of these alternative short-term loans.”

Read More

Fox News Interview with CUNA CEO Bill Cheney on MBL

Credit Union National Association (CUNA) President/CEO Bill Cheney was recently interviewed on Fox News regarding Member Business Lending.  Cheney noted that credit unions “are ready to do more” to help the economy; they just need Congress to act by increasing the member business lending cap to make more capital available to the nation’s small businesses.  Bill Cheney’s interview can be seen HERE.

Federal Reserve Issues Final Rules For Amended Risk

The Federal Reserve recently issued final rules requiring credit unions to provide an amended risk based pricing notice that includes a credit score if that information is used to set material terms of credit.  Similarly, the Federal Reserve issued a final rule requiring credit unions to provide an amended adverse action notice that includes a credit score, if such information is used to take an adverse action.

There has been a bit of uncertainty surrounding the effective date of these changes.  Under the Dodd-Frank statute, the amendments to risk based pricing notices and adverse action notices become effective on July 21, 2011.  The final rules, which were issued on July 6th, indicate that the final rules take effect 30 days after the final rules are published in the Federal Register.  At this time, the final rules have not been published in the Federal Register, but we anticipate that will occur soon.

After internal discussion and a conversation with CUNA, it is the recommendation of the Regulatory Affairs Department that credit unions strive to comply as of July 21st, to the extent that it is possible.  If that is not possible, complying by the final rule’s effective date appears to be permissible in the eyes of the Federal Reserve.

We will keep you updated with any further developments.  If you have any questions, please do not hesitate to contact Mark Robey at 720-479-3327 or or Nicole Soto at 800-352-0387, ext.208 or .