* WASHINGTON (10/7/09)--The Department of Veterans Affairs (VA) has asked financial institutions to honor emergency advance education payments that have been issued as checks from U.S. Bank. These checks, which began being issued last Friday, are for combat veterans to pay their educational benefits for the 2009 school term, and will be accompanied by a letter from the VA that validates the legitimacy of the check. According to the Credit Union National Association, some credit unions have questioned the validity of these checks, as they are drawn to U.S. Bank rather than the Department of the Treasury, as usual. Financial institutions that want to verify a given check may do so by contacting the VA at 1-800-827-2166. Additional contact information may be found at www.va.gov
.... * WASHINGTON (10/7/09)--The financial services industry needs to either support a proposed consumer protection agency, or prepare to be overrun by individual financial reforms that would affect credit cards, overdrafts and interchange fees, policy analysts say (American Banker
Oct. 6). Bankers continue to oppose the creation of a consumer agency, but House Financial Services Committee Chairman Barney Frank (D-Mass.) said last month they need to pick their battles. Frank said he plans to continue pushing individual reforms until an agency is created. The chairman also is conducting a hearing Thursday on card reform and interchange fees. Meanwhile, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) is expected to introduce legislation that would restrict overdraft fees. Consumer advocates say policymakers should keep pressure on the banks. The credit card industry “deserves a kick in the head for what they are doing,” said Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group. If Frank wants to go “a la carte” for awhile on reforms, he has the group’s support, Mierzwinski added ... * WASHINGTON (10/7/09)--A version of a derivatives regulation bill, by House Financial Services Committee Chairman Barney Frank (D-Mass.), would give financial institutions and others more flexibility to use derivatives for hedging purposes without sending them through a clearing house. In comparison, a Treasury draft of a bill submitted to Congress in August would require all end user firms to use a clearing house unless they could show the derivative would be used to hedge against risk. Though Frank’s bill is more flexible, larger banks may not support it because they would still have to fulfill clearing and exchange-trading requirements (American Banker
Oct. 6). Financial observers also say it would hurt dealers’ profits. The bill appears to have won the support of moderate Democrats, but it’s unclear what members of the House Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC), think about the matter. A hearing is scheduled for today to further discuss the bill. CFTC Chairman Gary Gensler is slated to testify ...