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Barr Treasury backs CU help to small business
WASHINGTON (2/24/10)--Calling credit unions an essential part of the "fabric" of communities throughout the country, Assistant Treasury Secretary for Financial Institutions Michael Barr on Tuesday told attendees of the Credit Union National Association's (CUNA) Governmental Affairs Conference that the Treasury would work with credit unions to expand their small business lending activity.
Click for slide show Michael Barr, assistant secretary for financial institutions for the U.S. Treasury Department, said a main goal of the Obama administration is to bolster the economy and create new jobs, but that it is also working to \"reform a financial regulatory system that remains fundamentally flawed.\" Specific to credit unions, BARR told attendees at the CUNA Governmental Affairs Conference (GAC) that Treasury wants to work with credit unions to expand their small business lending activities. (CUNA photo)
CUNA and credit unions are working to have legislation that would increase the cap on member business lending (MBL) to 25% of a credit unions assets added to a jobs bill in either the House or the Senate. This MBL legislation will be a key topic of discussion when credit union delegations meet with their state representatives this week. Barr also commented on the Treasury's recent work with the National Credit Union Administration (NCUA), saying that the relationship between the two regulatory bodies has never been stronger than it is today. The NCUA and Treasury have worked together to resolve issues affecting credit union legacy assets. The Treasury also offered $6 billion in funds to the NCUA to help shore up the corporate credit union system, and Treasury backed the NCUA's wishes to remain independent in the event that the ongoing financial regulatory reforms result in a single regulator for financial institutions. While a main goal at this time is buffeting the economy and creating new jobs, Barr said that the Treasury and the Obama administration are also working to "reform a financial regulatory system that remains fundamentally flawed." "These flaws, if not corrected, will weaken long-term growth and expose families, businesses, and taxpayers to unnecessary risk," Barr added. One method of correcting these flaws is through the creation of the proposed Consumer Financial Protection Agency (CFPA), and while there has been significant debate over the authority and the very existence of this proposed regulatory agency, Barr said that the CFPA bill that passed the House "leaves over 99% of credit unions with the [NCUA] as their primary federal consumer compliance supervisor." "The CFPA will concentrate supervisory resources on big banks and nonbanks" to "ensure" that the financial marketplace that credit unions compete in is "fair and competitive." Echoing the Obama Administration's opinion on the matter, Barr added that the CFPA would "make banks and credit unions safer and sounder." The proposed CFPA would seek to protect consumers of financial products through the creation of a powerful independent agency with extensive rulemaking, oversight, and enforcement tools. However, legislators are reportedly considering a wide range of alternatives to the CFPA, and it is not certain that the CFPA will be included in the Senate's financial regulatory reform package. Barr's speech was also covered in The Washington Post, Bloomberg, and Business Week.
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