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Cheney makes Hill NCUA rounds on CU issues
WASHINGTON (7/21/10)—Credit Union National Association (CUNA) President/CEO Bill Cheney reached out to legislators and regulators on behalf of credit unions on Tuesday. Cheney first met with Rep. Barney Frank (D-Mass.), who serves as chairman of the House Financial Services Committee, and outgoing Sen. Chris Dodd (D-Conn.), who leads the Senate’s top financial services committee. In both meetings with the Senate and House committee leaders, Cheney emphasized the importance of alternative capital to credit unions and urged the congressional leaders to consider the issue in this and upcoming congresses.
Click to view larger image CUNA CEO Bill Cheney pumps up the prospects of credit unions’ pro-business, pro-growth MBL cap lift legislation during his discussion with Sen. Chris Dodd (D-Conn.)
CUNA has said that while the credit union system faces many issues, there is none more important for beleaguered credit unions than the issue of alternative capital. CUNA has steadily worked with the U.S. Treasury Department, all the while stressing the importance of credit union alternative capital authority. Cheney also stressed the importance of approving legislation that would lift the cap on member business lending (MBL) for credit unions to 27.5% of total assets. Member business lending legislation, which was recently introduced into the Senate by Mark Udall (D-Colo.), has been touted as a possible addition to a still-developing small business bill. The small business legislation could see a vote this week. Legislation that would have gifted small banks with $30 billion in government-backed funds to kick start their lending to small businesses was dropped by Senate democrats on Tuesday.
Click to view larger image Rep. Barney Frank (D-Mass.), a frequent credit union supporter, hears Cheney out as he outlines the many issues facing credit unions
CUNA has consistently backed lifting the MBL cap beyond the current limit of 12.25%, saying that doing such could create over 108,000 new jobs and inject $10 billion in new funds into the economy, at no cost to taxpayers. Cheney also lost no time in addressing credit union regulatory issues in separate meetings with National Credit Union Administration (NCUA) Chairman Debbie Matz and Board Member Gigi Hyland, along with senior agency staff. Cheney underscored CUNA’s continued willingness to work with the agency to achieve legislative victories for credit unions on such issues as increased member business lending authority and alternative capital for credit unions. CUNA commended NCUA for the improvements to its field of membership final rule and its new merger guidance, which CUNA had urged. The CUNA leader also addressed credit union examination and enforcement issues, as well as communication issues, and expressed credit union concerns regarding the proper funding of the allowance for loan and lease loss accounts (ALLL). Other topics raised with the regulators were NCUA's corporate credit union stabilization efforts, the timing of the highly anticipated corporate credit union rule, and dealing with “legacy " or undervalued assets held by the corporates. CUNA is following up with NCUA on all these matters. "I appreciated our meetings today, which I felt were beneficial,” Cheney said after the NCUA meetings. “There will always be some tension between the regulator, on the one hand, and regulated entities, such as credit unions, and their chief advocates, such as CUNA, on the other," Cheney observed. "We are in difficult times now and such times can magnify that tension.” He added, “One of my objectives as CUNA CEO is to work with the regulators when appropriate and to press for reasonable solutions when significant issues arise.” The new CUNA president/CEO has scheduled a meeting with U.S. Treasury Assistant Secretary for Financial Institutions Michael Barr in early August. He is also seeking a meeting time with the third NCUA board member, Michael Fryzel.


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