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Inside Washington (06/09/2010)
* WASHINGTON (6/10/10)--In a Wednesday article, “Durbin’s Curb on Debit Fees Draws Fire for Hurting Consumers,” Bloomberg Businessweek highlights Rep. Debbie Wasserman Schultz’s (D-Fla.) concerns that a Senate proposal to limit card interchange fees will enrich merchants at the expense of consumers. Wasserman Schultz has opposed previous attempts to regulate interchange on credit cards. She intends, along with Rep. Kenny Marchant (R-Texas), to send a letter opposing the amendment to a bipartisan panel of House and Senate conferees who are charged with merging the two houses’ versions of the financial overhaul bill. In a related event, the Credit Union National Association (CUNA) issued a recent action alert on interchange that has resulted in more than 280,000 e-mail and phone contacts to federal lawmakers, which request opposition to the interchange provision. CUNA and the state leagues also have organized a “fly-in” effort, which has resulted in close to 1,000 credit union advocates coming to Washington, D.C. Tuesday through today to meet face-to-face with legislators. As part of the visits, CUNA has encouraged credit union reps to gather support for the Wasserman Shultz-Marchant letter to conferees today … * ALEXANDRIA, Va. (6/10/10)--The National Credit Union Administration (NCUA) Wednesday posted on its website the first of three videos to help credit unions understand the corporate credit union crisis. Track No. 1, which covers the history and services of corporate credit unions, is available at the link. Track No. 2 will describe types of corporate credit union investments, how the investments were affected by financial market declines, and how problems with investments affected corporates and threatened the credit union system. Track No. 3 will focus on NCUA's efforts to stabilize the credit union system, ensure access to adequate liquidity and uninterrupted lending and payment processing, and achieve the least costly outcome for federally insured credit unions. NCUA Board Chairman Debbie Matz said that "more information about the history, structure and function of the corporates will assist credit unions in making sound decisions about the future." When all three tracks are posted online, NCUA will send a free DVD of the tracks to all federally insured credit unions ... * ALEXANDRIA, Va. (6/10/10)--The National Credit Union Administration (NCUA) has selected Herb Yolles to serve as temporary Region III Director, effective through the end of this year. Yolles was named acting director or Region III, which covers Alabama, Florida, Georgia, Indiana, Kentucky, Mississippi, North Carolina, Ohio, South Carolina, Tennessee, Puerto Rico and the U.S. Virgin Islands, in May. The NCUA explains the difference between the two posts like this: a temporary posting is the the permanent Regional Director for a specific period of time. The agency can only detail a person to a higher position for up to 120 days. Any longer than that, and the agency must let all compete for the temporary position. Alonzo Swan previously served as Region III Director and was reassigned to the position of special assistant to Executive Director Dave Marquis early last month. Yolles first joined the NCUA in 1978 and has served as Chief Financial Officer, Deputy Director of Examination and Insurance, President of the Central Liquidity Facility, Inspector General, and, most recently, as Associate Regional Director of Operations in Region II … * WASHINGTON (6/10/10)--Legislation that would extend the current deposit insurance coverage of $250,000 per account at all financial institutions that failed in 2008 is gaining leverage and could be included in the final regulatory reform bill (American Banker June 9). The measure aims to assist depositors of IndyMac Bank, who lost money when the thrift failed. The bill, sponsored by Reps. Jane Harman (D-Calif.) and David Dreier (R-Calif.), has garnered support from House Financial Services Committee Chairman Barney Frank (D-Mass.) and the Federal Deposit Insurance Corp. IndyMac failed three months--in July 2008--before Congress extended the deposit insurance limit to $250,000 from $100,000. Credit unions’ deposit insurance through the National Credit Union Share Insurance Fund also was extended to $250,000 per account from $100,000 per account ... * WASHINGTON (6/10/10)--With conferees beginning discussions today on regulatory reform legislation, Sen. Susan Collins (R-Maine) said she is open to adding a phase-in of existing trust-preferred securities into a provision she’s sponsoring that would rid the use of such securities as Tier 1 capital. Collins, who has not abandoned her argument that trust-preferreds should not count toward capital, told American Banker that she’s looking into some suggestions regarding a transition period if the provision is implemented (June 9). Collins, who supported the Senate bill and will be a crucial swing vote to prevent a filibuster on the final reform legislation, didn’t comment on whether she’d oppose the legislation if her provision is dropped ... * WASHINGTON (6/10/10)--A bill that would create a $30 billion fund to boost small business lending is expected to pass the House this week and move to the Senate next week. The House Financial Services Committee approved the bill on May 19, which aims to provide capital to community banks to spark small business lending. Some lawmakers have said they oppose the bill, arguing it is a repeat of the Troubled Asset Relief Program (American Banker June 9). The Credit Union National Association (CUNA) is lobbying to raise the 12.25% of assets cap on member business lending at credit unions to 25%. CUNA estimates that if the cap is lifted, $10 billion would be freed nationally to help small businesses, and about 100,000 jobs could be created ... * WASHINGTON (6/10/10)--Senate Democrats are supporting a plan to raise taxes on investment fund manager profits (American Banker June 9). The plan proposes a 33% effective rate on fund-manager income, now taxed at 15%. The House passed a similar proposal last month that would impose a 35% tax on the income. The tax is part of a $140 billion package to provide jobless benefits and expired tax breaks, which the Senate began debating on Tuesday. Senate Democrats also proposed a 31% rate for carried-interest profits from investments of seven years or more to please senators concerned about the effect of the increase on venture capitalists and real estate partnerships ...


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