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Inside Washington (03/18/2011)
* WASHINGTON (3/21/11)--The Treasury Department will place its own nominees on the boards of banks that fail to meet terms of their government bailouts, a senior official said Thursday (American Banker March 18). Treasury is in the process of identifying individuals who can have the most positive effect on bank boards, said Timothy Massad, acting assistant secretary for financial stability. The board nominations are expected to be announced soon, Massad said. Most of the $204.9 billion disbursed under the Troubled Asset Relief Program’s Capital Purchase Program have been paid back, but some banks have missed dividend or interest payments. As of the end of February, 189 banks had failed to make at least one scheduled dividend or interest payment. Thirty-two have yet to make at least six payments, the agency said. After an institution fails to make six payments, the Treasury has the right to elect two members to the bank's board of directors … * WASHINGTON (3/21/11)--The Federal Reserve last week clarified portions of its Regulation Z, altering the rule to prevent card issuers from requesting a consumer's household income on credit applications. The amended rule will instead require issuers to request a consumer’s individual income or salary, the Fed said. The amendment will also prohibit issuers from revoking initial offers of interest-free credit during a specified amount of time “unless the account becomes more than 60 days delinquent.” The Fed currently imposes similar rules on so-called “teaser” credit card rates. It has also moved to include application and other first-time fees under a rule that limits the total amount of fees charged on a credit account to 25% of the account’s credit limit... * WASHINGTON (3/21/11)--Community bankers are divided on a provision of the Dodd-Frank Act that would allow for the payment of interest on commercial checking accounts. Some believe the repeal of Reg Q could cut into margins and cause commercial clients to seek the highest bidder (American Banker March 18). Though the repeal of Reg Q is one paragraph in 2,300 pages of legislation it affects the foundation of many institutions’ commercial banking strategies, according to Cliff McCauley, a senior executive vice president at the Cullen/Frost Bankers Inc. unit Frost Bank and a former chairman of the Independent Bankers Association of Texas. The Independent Community Bankers of America (ICBA) is surveying its members on the repeal. Preliminary results show a split of opinion among ICBA members as to whether they believe they will be impacted by the repeal. Bankers more anxious about the change said those less concerned not may not be considering the long-term impact. Frank Sorrentino III, chairman/CEO of the $602 million-asset North Jersey Community Bank, Englewood Cliffs, N.J, said the repeal may not have an immediate effect in the current low-rate environment. But rates will eventually rise, he said, affecting each bank’s commercial viability … * WASHINGTON (3/21/11)—House Financial Services Committee Chairman Spencer Bachus (R-Ala.) announced the planned schedule for the rest of March and April. The schedule is tentative and will depend on witness availability and other factors that may require changes. Hearing witnesses will be announced at later dates. All times are Eastern. March 30: Oversight and Investigations Subcommittee hearing on cost of Dodd-Frank implementation, 2 p.m.; March 31: Capital Markets Subcommittee hearing on legislative proposals on GSEs, 10 a.m.; April 1: Insurance and Housing Subcommittee hearing on NFIP at 10 a.m.; April 5: Capital Markets Subcommittee markup of government-sponsored enterprise bills at 10 a.m.; April 6: Financial Institutions Subcommittee hearing on the small business lending fund at 10 a.m., and Insurance and Housing Subcommittee markup of the National Flood Insuranch Program bill at 2 p.m.; April 7: Domestic Monetary Policy Subcommittee hearing on the U.S. Mint Bullion Program at 10 a.m.; April 13: International Monetary Policy Subcommittee hearing on Ex-Im Bank at 10 a.m., and Insurance and Housing Subcommittee hearing on Federal Housing Administration and Ginnie Mae legislative proposal at 2 p.m.; April 14: Oversight and Investigations Subcommittee hearing on the Stanford Financial Ponzi scheme at 10 a.m., and Capital Markets Subcommittee hearing on risk retention at 2 p.m. …


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