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APRs small biz exec pay on congressional agenda
WASHINGTON (6/9/09)--Legislation that would set a de facto rate cap on consumer loans could take another step toward the Senate floor when the Senate Judiciary Committee discusses S. 257, the Consumer Credit Fairness Act, during a Thursday markup session. The legislation would look to cap the annual percentage rates for loans of all kinds at 19% by amending the current bankruptcy code. The bill, as currently constructed, would allow consumers of "high cost" consumer loans, including credit cards, to transition directly to Chapter 7 "fresh start" bankruptcy proceedings. The legislation would define a "high cost" loan as loan in which the APR, at any time, exceeds the lesser of 15% plus the yield on 30-year U.S. Treasury securities, or 36%. While the bill was set to be debated last week, the Senate Judiciary Committee’s full slate pushed discussion back to this Thursday. Also this week, the Credit Union National Association (CUNA) will take part in a Wednesday House Small Business Committee hearing, "Laying the Groundwork for Economic Recovery: Expanding Small Business Access to Capital," with Roger Heacock, president/CEO of Black Hills FCU in Rapid City, S.D., testifying on CUNA’s behalf. Discussion at the hearing will focus on the role of the Small Business Administration's financing programs, and CUNA believes that the hearing will provide a valuable opportunity to inform Congress on some of the issues facing credit unions involved in small business lending. Testimony from the hearing will be available on CUNA’s legislative affairs website. Elsewhere in Washington, U.S. Treasury Secretary Timothy Geithner and Internal Revenue Service (IRS) Commissioner Douglas Shulman will testify at a Tuesday Senate Appropriations Committee financial services subcommittee hearing on proposed Treasury and IRS budget estimates. The House Financial Services Committee also plans to address executive compensation structure and systemic risk during a Thursday hearing. Though it is not on the schedule for this week, the House Judiciary Committee could begin discussion on interchange fee legislation at any time. Rep. John Conyers, Jr. (D-Mich.) introduced H.R. 2695, the "Credit Card Fair Fee Act of 2009, late last week. The bill would allow merchants to negotiate credit card transaction fees with financial institutions via an antitrust exemption. Conyers, who has chaired the judiciary committee since 2007, could bring the legislation up for debate at any point. However, it is considered likely by some that Congress will not discuss the legislation until the Government Accountability Office (GAO) completes its study of interchange fees, as mandated by the recently enacted H.R. 627, the Credit Cardholders' Bill of Rights. Representatives from CUNA will discuss the interchange issue with the GAO as it develops the study.
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