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News Now

Washington
New financial regulation wont harm CUs Frank says
WASHINGTON (2/25/10)—Congress is about to pass the most significant piece of financial regulation legislation since the New Deal, but the legislation will not “make it harder for you to perform your services,” Rep. Barney Frank (D-Mass.) told credit union representatives Wednesday.
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Frank spoke at the general session of the Credit Union National Association’s (CUNA’s) Governmental Affairs Conference. He also emphasized that credit unions didn’t cause the nation’s economic problems, and therefore would not be penalized. Repeating a remark he has made publicly over the last year, Frank told attendees of the conference, “If mortgages were only made by credit unions, we wouldn’t be in this crisis.” The crisis was largely caused by unregulated financial institutions—and if the new legislation is enacted, check cashers and payday lenders would be most affected by the changes. Frank also noted that in drafting the legislation, lawmakers will take the principles that credit unions operate under and apply them to all financial institutions. Frank also spoke about three significant items of interest to credit unions:
* Overdraft fees: Legislation has been proposed that would limit overdraft fees to once a month, for a maximum of six times per year. CUNA opposes this legislation because it would hinder credit unions’ ability to provide overdraft protection to members. Frank said that limiting the fees would be a mistake; * Member business lending: The issue is very controversial, and therefore lawmakers in the House “don’t want to walk the plank without knowing what the Senate will do,” Frank said. However, he encouraged credit unions to continue lobbying in favor of an increased cap on business loans to their members; * Interchange fees. CUNA opposes government intervention in setting interchange fees. Frank said they would not be in the agenda this year.
Overall, Frank expressed his support for increasing the credit union movement’s powers to benefit the economy. “Keep up your good work,” he said.


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