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Washington
Inside Washington (04/04/2008)
* WASHINGTON (4/7/08)--Representatives of credit unions, community banks and small businesses testified at a Thursday House Committee on Small Business hearing that credit card regulations could hurt small businesses while academics said businesses who use the cards for financing are at risk (American Banker April 4). Rep. Nydia M. Velazquez (D-N.Y.) said the cards help businesses access the capital they need to grow. William Spearman, president/CEO of Mid-Hudson Valley FCU, Kingston, N.Y., said the cards help federal credit union members with their small businesses. Robert J. Lahm Jr., professor at Middle Tennessee State University’s business college, said credit card companies aggressively target small businesses--and those with business cards are just as personally liable as individuals with personal cards. David A. Walker, a business professor at Georgetown University, said credit costs are high for small businesses. When in debt, they may pay two times the interest rate that larger firms pay, he added ... * WASHINGTON (4/7/08)--Bailing out Bear Stearns Co. could turn over a profit for the government, federal regulators told lawmakers at a Senate Banking Committee hearing Thursday (American Banker April 4). Federal Reserve Board Chairman Ben Bernanke said the government “got a good deal” in assuming the company’s assets. Sen. Richard Menendez (D-N.Y.) questioned this, responding that the value of assets the Federal Reserve Board gained from Bear Stearns is unknown. Lawmakers also questioned officials about cost of fees, which the officials said have not been decided. Sen. Christopher Dodd (D-Conn.) suggested JPMorgan Chase and Co. wasn’t investing “any money” in the deal because Bear will pay $30 million to the company at the close of the deal, but Bernanke said JP Morgan is taking a $1 billion risk. James Dimon, JPMorgan chairman and CEO, said it would not have been able to buy Bear without the Fed’s help. Sen. Jon Tester (D-Mont.) asked Bernanke why JPMorgan needed the Fed to help with collateral if the assets were solid, but the Fed chairman said the company was worried about what the deal could imply for its liquidity, risk profile and capital ... * WASHINGTON (4/7/08)--The credit union community should get involved in financial literacy efforts, said National Credit Union Administration (NCUA) Chairman JoAnn Johnson in a statement Friday. April has been recognized as “Financial Literacy Month” by Congress. NCUA plays an active role through the Financial Literacy and Education Commission (FLEC), which consists of 20 federal agencies, Johnson added. She also applauded President Bush for his creation of the Advisory Council on Financial Literacy ...


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