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NCUA announces dual CU closures

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ALEXANDRIA, Va. (10/2/09)--The National Credit Union Administration (NCUA) on Thursday reported that Alaska USA FCU will assume the assets and members of The Members’ Own FCU after Members’ Own accepted Alaska USA’s sale offer. Members of The Members’ Own FCU, which held $85 million-in-assets from 11,000 members, will now be able to take advantage of “a broad array of financial services offered throughout the United States” via $4.1 billion-in-assets, 375,000-member Alaska USA FCU, the NCUA release announcing the purchase said. Alaska USA currently serves its membership via 56 branches in Alaska, California, and Washington, and also does business through a 5,600-unit network of shared branches, according to the NCUA. The NCUA has also announced a second credit union closure, reporting that San Antonio-based Security Service FCU will assume the assets and member shares of West Texas CU, which has been liquidated. The $78 million in assets and 25,000 members of the El Paso, Texas-based credit union will now be served by the $5 billion-in-assets, 680,000 member credit union which serves Air Force members throughout the country. In a release announcing the acquisition, Security Service FCU President/CEO David Reynolds said his credit union was "pleased" to welcome former West Texas CU members to the "family," adding that he looks "forward to serving and being part of the El Paso community."

CUNA issues comment call on HELOC changes

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WASHINGTON (10/2/09)--The Credit Union National Association (CUNA) has issued a regulatory comment call on the Federal Reserve Board’s issuance of a proposed rule that would amend the disclosure requirements of Regulation Z for home-equity lines of credit (HELOCs). The proposal, which will require creditors to provide specifically designed disclosures for a given consumers credit account, will replace the current generic, one-page HELOC disclosure. The information will also be presented in a tabular format, and creditors will need to present similar information in a similar format at the time of the account’s opening as well. Under the proposal, creditors will also be required to notify consumers of any changes to their account 45 days before those changes are to come into effect. Creditors will also be prevented from terminating any accounts that have not passed a 30-day late payment threshold. Comments are due to CUNA by Dec. 10. Comments solicited by the Fed should be submitted by Dec. 24. To view the CUNA comment call, use the link.

House committee to hold hearing on Interchange CARD Act changes

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WASHINGTON (10/2/09)--The House Financial Services Committee on Thursday announced that it has scheduled for Oct. 8 a hearing on H.R. 2382, the Credit Card Interchange Fees Act of 2009 and H.R. 3639, the Expedited CARD Reform for Consumers Act of 2009. The Credit Union National Association (CUNA) has publicly stated that changing the current interchange fee structure, as some merchants, including 7-Eleven, have promoted doing, would adversely limit consumer options, competition and technological innovation. CUNA believes interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants and discussions regarding what value should be placed on the use of electronic payments should be within the purview of the industry participants. Legislation that would allow merchants to negotiate interchange fees has also been introduced in the Senate, but it is not expected that H.R. 2382 nor the Senate-based legislation will be brought up for a vote during the fall session. While it is not certain if and when a vote could happen, committee Chairman Barney Frank (D-Mass.) and House colleague Carolyn Maloney (D-N.Y.) recently introduced H.R. 3639, which, if approved, would move up the effective date of some portions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act to December of this year. The committee has not announced witnesses for the hearing.

Inside Washington (10/01/2009)

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* WASHINGTON (10/2/09)--Rep. Mel Watt (D-N.C.) criticized banking industry representatives during a House Financial Services Committee hearing Wednesday, saying that they were preventing him from improving a bill that would create a consumer protection agency. Watt, chair of the monetary policy subcommittee, has been viewed as an ally to the banking industry--which has balked at the idea of such an agency (American Banker Oct. 1). At Wednesday’s meeting, Watt accused the bankers of trying to kill the bill instead of improving it. The bankers’ approach to the bill is “exasperating” and change in the financial services industry is needed, Watt said. Rep. Barney Frank (D-Mass.), who is drafting the bill that would create such an agency, said he is confident the legislation would pass. Watt and other lawmakers, including Rep. Melissa Bean (D-Ill.), have indicated they would like to tailor the agency’s proposed powers. Two-thirds of subprime mortgages were originated by nonbank lenders, and because of that, Bean has questioned whether the agency should focus on subprime mortgages ... * WASHINGTON (10/2/09)--National Credit Union Administration (NCUA) board member Michael Fryzel recently visited Great Lakes CU in North Chicago.
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He toured the credit union and discussed credit union issues with Vikki Kaiser, Great Lakes CEO. “It is encouraging to see the efforts being made to meet the financial needs of their members,” Fryzel said. Great Lakes CU has $595 million in assets. From left are: Lorraine Kost, senior vice president of administration; Lee Piekarz, board chair; Kevin Bogac, senior vice president of information systems; Robert Green, director; Kaiser; Fryzel; Yvonne Bailey, vice president of marketing and planning; Bertine Nixon, director; and Kamil Sakici, senior vice president and chief financial officer. (Photo provided by the National Credit Union Administration) ... * WASHINGTON (10/2/09)--Ben Bernanke, Federal Reserve Board chairman, told lawmakers Thursday that the Fed should regulate the nation’s largest financial institutions. The Fed’s experience and power make it well-suited to be a consolidated supervisor for large institutions, Bernanke said. The responsibility for monitoring risk should be given to a council of regulators, including agencies that have power over various financial companies, he said. The council could monitor risks affecting investment banks, commercial and mortgage lenders, and pension and hedge funds (The New York Times Oct. 2). Democratic and Republican lawmakers have expressed skepticism about giving the Fed more power. Some have said they want to reduce the central bank’s power ...

MasterCard says 7-Eleven misled consumers on interchange

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WASHINGTON (10/2/09)—MasterCard Inc. released a study that charges consumers were misled by a 7-Eleven Inc. petition intended to drum up support for interchange fee regulations. On Wednesday, 7-Eleven executives made a dramatic deliver of 15,000 booklets of signatures to federal lawmakers as part of merchants’ push for interchange rate reform. This summer, MasterCard commissioned KRC Research to survey more than 1,000 adults in August and then again in September on interchange issues (American Banker Oct. 1). Seventy-three percent of the respondents, half contacted online, half by phone, agreed with the statement "the cost of accepting credit card payments" is a business cost merchants should bear, and 71% agreed that it is unfair for consumers to pay merchants' expenses for accepting cards. However, 80% of people who signed the petition "mistakenly believed," according to the MasterCard report, that consumers would benefit from lower interchange rates. (See related story: House interchange hearing on Oct. 8)