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Inside Washington (10/31/2008)
* WASHINGTON (11/3/08)--House Financial Service Committee Chairman Barney Frank (D-Mass.) last week criticized any financial institution that is “distorting the legislation that Congress passed at the president’s request to respond to the credit crisis.” He said the intent of Congress in authorizing the U.S. Treasury Department’s Troubled Asset Relief Program (TARP) was to make funds available for increased lending. Any use of the these funds for any purpose other than lending--bonuses, severance pay, dividends, acquisitions of other institutions and more--is a violation of the terms of the act, the chairman said in a release. He said his committee will conduct oversight hearings Nov. 12 and 18 ... * WASHINGTON (11/3/08)--The Securities and Exchange Commission (SEC) last week hosted a roundtable discussion on mark-to-market (MTM) accounting, giving proponents and detractors of the accounting method a forum to discuss their differences. Certain assets, some of which are held by credit unions, are required to be measured using the MTM accounting technique. This essentially requires these assets to be valued at the price they could be sold for today on the open market. The recently enacted Emergency Economic Stabilization Act requires the SEC to conduct a study on MTM accounting and report its findings to Congress by Jan. 2. The study is to include the effects of MTM accounting on a financial institution’s balance sheet. The act also authorizes the SEC to suspend application of MTM. Those opposed to the use of MTM argue that a financial institution’s intention to hold assets for the long term should be a factor in valuing them. Those in favor of the accounting technique argue that allowing a bank’s management to value assets will only lower investor confidence. The debate will continue at the SEC’s next roundtable on Nov. 21 ... * WASHINGTON (11/3/08)--Senate Banking Committee Chairman Christopher Dodd (D-Conn.) sent a letter to President Bush urging him to move forward with foreclosure prevention efforts, saying that media reports have exaggerated the administration’s progress (American Banker Oct. 31). The administration needs to use loan guarantees and credit enhancements for systematic loan modifications with the Federal Deposit Insurance Corp., he said ... * WASHINGTON (11/3/08)--The National Credit Union Administration (NCUA) was presented with the Combined Federal Campaign (CFC) President’s Award. The award, the highest CFC award given to an agency, is granted when an agency has at least 75% employee participation in the CFC or a $275 per capita gift. During 2008, NCUA’s Central and Region II office staffs gave an average CFC gift of $506, with a participation rate of 72.4%. “Credit unions succeed because volunteers give their time and effort,” said NCUA Chairman Michael Fryzel. “For the past 75 years, federal credit unions have been instrumental in helping people achieve their financial goals. Volunteer donations go a very long way in improving the lives of others, especially in these difficult financial times.” ... * WASHINGTON (11/3/08)--National Association of State Credit Union Supervisors (NASCUS) President/CEO Mary Martha Fortney encouraged the National Credit Union Administration to continue working with regulators as the economic crisis affects the examination and supervision of state-chartered, federally insured credit unions. She also addressed the importance of future regulatory enhancements including access to supplemental capital, prompt corrective action changes and increased member business lending capabilities. She explained that NASCUS and state regulators are committed to working with NCUA to ensure credit unions have the resources to remain safe and sound ...


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