WASHINGTON (10/2/08)—The U.S. Senate voted 74-25 last night to approve a multi-billion dollar financial rescue package that included a temporary increase in federal share and deposit insurance coverage. The $700-billion rescue plan is expected to be taken up by the U.S. House Friday and, if passed, quickly sent to the President’s desk for his signature transforming the bill to public law. Under the deposit insurance provisions, the current $100,000 limit on share and deposit accounts would be raised for one year to $250,000. The Credit Union National Association (CUNA) supported that increase and sent letters to President George W. Bush, Treasury Secretary Henry Paulson and members of Congress Monday urging them to make sure to include credit unions in any plans for increased deposit insurance coverage. CUNA President/CEO Dan Mica said of the Senate’s vote, “It is important to America’s credit unions that they have parity with banks in any increase in federal deposit insurance coverage. We are pleased to see this goal achieved in the Senate’s financial rescue legislation.” Mica added that another CUNA goal has been to ensure credit unions have access, if needed, to the legislation’s relief measures for troubled assets. “By providing this access, the Senate legislation is careful not to place credit unions at a disadvantage. CUNA will continue to press for similar treatment in the House as it resumes its consideration of this legislation,” Mica said. The overall rescue bill—intended to shore up the nation’s economy in light of such factors as the current mortgage crisis and wildly fluctuating activity on Wall Street—would allocate up to $700 billion to the U.S. Treasury Department to buy up mortgage-backed securities whose values have dropped or become hard to sell. The package gives the government an ownership share in the companies that participate in the program, an element that was missing from earlier rescue drafts. This provision makes it so taxpayers could benefit from any increased value in the securities created by the government’s support.
WASHINGTON (10/2/08)—On day after clarifying its fair value accounting rules for mortgage-backed securities, the Financial Accounting Standards Board (FASB) Wednesday said it may issue additional guidance as early as this week about its mark-to-market standards, while the Senate may give the Securities and Exchange Commission (SEC) additional flexibility in the matter. In a meeting yesterday, FASB officials said the Statement of Financial Accounting Standards (FAS) No. 157, Fair Value Measurements, which establishes a framework for measuring fair value that applies broadly to financial assets and liabilities, needs additional guidance to provide clarity and assist in these unprecedented times. The expected FASB guidance will address, among other things, the relevant input, such as broker quotes or the use of pricing services, to determine fair value in an inactive market. FASB said it seeks to clarify Statement 157 and illustrate examples of how to determine the fair value of a financial asset when the market for that financial asset is not active. "The objective of the guidance is to clarify the framework within which financial statement users, preparers, auditors, and others are to determine the fair value of assets and liabilities when markets are not active,” said FASB. Many in the financial services industry, including the Credit Union National Association (CUNA), have urged additional FASB accounting guidance on fair value accounting standards. Meanwhile, the Economic Stabilization Act of 2008 passed last night by the Senate includes language that would allow the SEC to suspend the mark-to-market requirements for mortgage-backed securities. In certain instances, Generally Accepted Accounting Principles (GAAP) on fair value require assets to be marked to market. While credit unions are not supervised directly by the SEC, they are required to follow GAAP, and the suspension of these standards would impact the financial statements of credit unions with mortgage related instruments, according to CUNA Accounting Task Force Chairman Scott Waite, who also is senior vice president and chief financial officer at Patelco CU in San Francisco. Access more information from FASB using the resource link below.
WASHINGTON (10/2/08)—The Community Development Financial Institutions (CDFI) Fund is accepting applications for the Fiscal Year 2009 funding round of the Native American CDFI Assistance (NACA) Program. Credit unions and other financial institutions that are certified CDFIs can apply for funding for work in Native American, Alaskan Native and Native Hawaiian communities. New certification applications are due Nov. 3. The Fund expects to award approximately $8 million in appropriated funds for the NACA Program in 2009. Applications for grants and technical assistance are due Dec. 19. Applications must be submitted electronically through Grants.gov. Applications sent by mail, facsimile or other form will generally not be accepted. For more information on the program and application rules, use the resource link below to access the Federal Register.
WASHINGTON (10/2/08)-Interested parties have until Dec. 1 to comment on a National Credit Union Administration (NCUA) plan to allow credit unions eligible under the Regulatory Flexibility Program (Reg Flex) additional time to occupy properties bought in an unimproved state. The agency approved its proposal for comment at its Sept. 25 open board meeting and yesterday’s Federal Register
announced the comment deadline. Currently, when a federal credit union acquires unimproved land for future expansion and does not fully occupy the completed premises within one year, it must partially occupy the property within three years or obtain a waiver. The NCUA proposal would extend that three-year period to six years. Also at the meeting, the NCUA approved two final regulations:
* One revises the agency's rule governing the requirements for use of the official insurance sign and official advertising statement to give credit unions the flexibility to use the basic form of the official statement, a shortened form, or just the official sign. * The other to streamlines the agency's system for complying with freedom of information and privacy laws.
Both rules are effective Oct. 31, according to the Federal Register