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Fast-paced action rules in intense atmosphere

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Click to view larger image Before a well-attended House press conference on Capitol Hill yesterday, CUNA Communications Vice President Pat Keefe reminds reporters that credit unions will also benefit from the financial rescue legislation's provisions raising credit union federal share insurance coverage to $250,000. (Photo provided by CUNA
WASHINGTON (10/3/08)--The atmosphere remained intense in Washington--and the action fast-paced--as the Credit Union National Association (CUNA) worked Thursday to ensure credit unions were well-represented in the financial rescue legislation, and the words and actions being used to describe the bill, given its impact on the economy and overall public confidence. Among the developments and actions:
*Following encouragement through repeated contacts by CUNA with the Treasury and the White House, President George W. Bush specifically mentioned credit unions being included in deposit insurance coverage in the bill passed by the Senate, and under consideration today by the House. “This was huge in terms of raising the visibility of the parity issue,” said CUNA President/CEO Dan Mica. CUNA urged House leadership to do the same in their public remarks about the bill. *CUNA continued to reach out to national press with phone calls and email contacts reminding them of the increased coverage leverage for credit unions as they prepare cover the House vote. CUNA communications staff also visited Capitol Hill press galleries handing out press releases reminding them to include "credit unions" in their reporting on the financial rescue legislation's provisions on expansion of federal deposit insurance coverage. *Nearly 200 radio stations so far have aired a radio news release CUNA released Wednesday--featuring comments by CEO Mica--about credit union federal deposit insurance coverage. Markets where the segment aired included Los Angeles, New York, Chicago, Philadelphia and Minneapolis. *Ahead of the House vote today, CUNA blast-distributed a second press release to more than 500 news organizations and news outlets across the nation, pointing out that the Senate-passed legislation now before the House will increase federal insurance at credit unions, as it will at banks. A version was shared with league communicators so they can issue similar reminders to their state and local media. *CUNA is coordinating with NCUA on efforts to support language that would preclude adjustment of the 1% NCUSIF deposit and/or the assessment of a premium to pay for the additional insurance coverage levels in order to minimize the cost to credit unions of any additional insurance coverage. *Letters were sent by CUNA to each House member urging support of the financial rescue bill. Many leagues and individual credit unions are doing the same. CUNA lobbyists continue to note that credit unions did not cause the problems we face but they and their members are certainly being affected by current economic conditions, and so the cost of inaction may well outweigh the cost of action. *With the Senate vote on the financial rescue bill completed, CEO Mica contacted Senate Banking Committee Chairman Chris Dodd (D-Conn.) to press for final passage of the Credit Union, Bank and Thrift Regulatory Relief Act (CUBTRRA) prior to Senate’s adjournment. CUBTRRA--which grants credit unions new authorities to serve lower-income individuals--has already passed the House with the support of banks and credit unions and is considered noncontroversial.

Inside Washington (10/02/2008)

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* WASHINGTON (10/3/08)--A refinancing program launched by the Department of Housing and Urban Development (HUD) Wednesday has triggered analysts’ concerns because the program requires that borrowers with payment and debt-to-income ratios over a certain amount complete a three-month trial before the loan is insured by the Federal Housing Administration (FHA). The rule requires the FHA lender and servicer to “work hand in glove,” said Rod Dubitsky, Credit Suisse Group head of asset-backed securities research (American Banker Oct. 2). Borrowers must also provide new lenders with two years’ worth of tax returns from the Internal Revenue Service, and they cannot participate if the mortgage is on a second home. They also are required to have made at least six payments. The plan is open to improvements, said HUD Secretary Steve Preston ... * WASHINGTON (10/3/08)--As of Thursday, the House had not yet passed the bailout bill. The Senate passed the bill Wednesday after adding tax breaks (American Banker Oct. 2). The bill is “take it or leave it on our side,” said Rep. Michele Bachmann (R-Minn.). Bachmann opposes the bill and said the Senate took a high-stakes risk by passing it. Others may switch their vote, including Rep. Patrick Tiberi (R-Ohio) who opposed the legislation Monday but is now reconsidering. Rep. Melissa Bean (D-Ill.) said it is up to the Republicans to change their minds on the bill. Speaker of the House Nancy Pelosi doesn’t need Republican votes, and that she can “deliver those votes” without the Republicans, Bachmann added ...

NCUA charters new Texas CU

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ALEXANDRIA, Va. (10/3/08)—There is a new federal credit union in Dallas, Tex., according to an announcement by the National Credit Union Administration (NCUA) Thursday. Oak Cliff Christian FCU has a field of membership with 8,500 potential members. The NCUA said the credit union will serve members and employees of the Oak Cliff Bible Fellowship Church and its subsidiaries, as well as students of the fellowship Christian Academy--all based in Dallas. The credit union office will be located on the campus of the Oak Cliff Bible Fellowship Church. The credit union’s founders decided to charter the credit union to “offer the field of membership a place to confidently deposit their savings and investments with security for the future,” and to provide a safe, sound democratic alternative to traditional financial institutions, according to the NCUA.

CUNA Lame duck could be good for CUBTRRA

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WASHINGTON (10/3/08)—Senate Majority Leader Harry Reid (D-Nev.) has declared that the Senate will return for a lame duck session in November, which would give credit unions one more shot at regulatory improvements in 2008. Reid has said the Senate will return for several days during the week of Nov. 17. John Magill, senior vice president of legislative affairs for the Credit Union National Association (CUNA), said that development is good for credit unions. “The Senate is where CUBTRRA now sits,” Magill said, referring to the Credit Union, Bank and Thrift Regulatory Relief Act (H.R. 6312), approved by voice vote in the House on June 24. “A so-called lame duck session in the Senate, after the federal elections, will give us another opportunity—another shot at getting the regulatory improvements through the Senate this year.” For all financial institutions, CUBTRRA would provide exceptions to annual privacy notice requirements under the Gramm-Leach-Bliley Act for institutions that don’t share information with affiliates or that have not changed their privacy policies. For credit unions, the bill:
* Permits federally chartered credit unions (FCUs) to have up to 10% of aggregate assets in investment-grade securities; * Raises to 3% from 1% of assets the limit on an FCU’s total investment in or loans to a credit union service organization (CUSO); * Excludes member business loans (MBLs) to non-profit religious groups from the credit union MBL cap; * Permits the National Credit Union Administration (NCUA) to set longer maturities for certain FCU loans; * Allows the NCUA greater flexibility in adjusting the FCU usury ceiling; * Permits the NCUA to set rules for continued service to previous groups by credit unions converting voluntarily to a community charter; * Permits the NCUA to allow FCUs of any charter type to serve underserved areas, while modifying the definition of an underserved area; * Codifies FCUs’ ability to provide short-term loans as an alternative to payday loans to anyone within their fields of membership; * Revises credit union governance provisions; and * Excludes MBLs provided in underserved areas from the MBL cap.
"Clearly there is precious little legislative time left on the 2008 clock. However, CUNA continues to work in Congress at every opportunity to advance legislation to provide regulatory relief for credit unions,” Magill said.

NEW 250K NCUSIF coverage now effective

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WASHINGTON (10/3/08, UPDATE 3:30 p.m. ET)--Today’s passage of the Emergency Economic Stabilization Act of 2008 will require the National Credit Union Administration (NCUA) to immediately increase share insurance protection to $250,000 on all types of accounts until Dec. 31, 2009. President George W. Bush this afternoon signed the economic rescue package passed by the House today. NCUA said it is reviewing all share insurance coverage materials included on the Internet Share Insurance Tool Kit, such as the “Your Insured Funds” brochure and print advertisement, to make needed revisions. Revised documents reflecting $250,000 coverage will be posted to the NCUA website as soon as possible, according to the agency.

Bush highlights CU share insurance

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WASHINGTON (10/3/08)—Correcting earlier omissions that the White House categorized as “oversights,” President George W. Bush Thursday clearly and unequivocally included credit unions in his remarks following a meeting with business leaders about the pending economic rescue package. The Credit Union National Association (CUNA) urged the President last week to instruct those within his administration to include federal credit union share insurance in messages meant to reassure Americans about the safety of their federally insured deposits. In a message apparently intended to spur support in the House for the Senate-approved $700 billion rescue plan, Bush said: “A lot of people are watching the House of Representatives now to determine whether or not they will be able to act positively on a bill that has been improved. People say, what do you mean by that? Well, the insurance for the FDIC goes up to $250,000. That's an improvement to the legislation -- not only for banks but for credit unions, as well.” John Magill, CUNA senior vice president of legislative affairs, said, “In addition to our letter to the President, we also talked to the White House at the highest levels and they agreed that credit union share insurance should be mentioned in future remarks. They are making good on that now.” Wednesday night, the Senate voted 74-25 in favor of the multi-billion dollar financial rescue package, which included a temporary increase in federal share and deposit insurance coverage to $250,000 for regular accounts. Retirement accounts continue to be covered up to $250,000 at federally insured depository institutions. The Senate housing rescue includes an amendment barring the NCUA and Federal Deposit Insurance Corp. from factoring the insurance ceiling increase into decisions about assessing a premium. The House is widely expected to vote on the economic rescue plan Friday.

NEW Deposit insurance increase just one step away

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WASHINGTON (10/3/08, Updated 1:30 p.m. ET )—The House passed the Senate-approved economic rescue package 263-171 Friday afternoon and now the legislation, which carries a temporary hike in deposit insurance coverage, just needs the signature of the President to become law. Credit unions have been questioning at what point can they refer to the new $250,000 insurance ceiling as they work to reassure members of the safety of their shares accounts. CUNA’s Ryan Donovan said, “It is possible the President may sign the bill today, but maybe not until tomorrow or Sunday.” Donovan is vice president of legislative affairs. 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. After the House vote, CUNA President/CEO Dan Mica said, "Credit unions had no hand in creating the root cause of the problem this bill aims to fix. Without question, however, they and their members like so many others are collateral damage of the economic hardship that has resulted. "In that sense, Congress had to act to avert any additional damage to the nation’s economy and inject confidence in our financial system. Along those lines, credit unions appreciate the fact that the bill reflects our priority of raising the level of federal deposit insurance at credit unions (through National Credit Union Share Insurance (NCUSIF) coverage) to $250,000, giving credit unions parity with the same increase for banks and the FDIC. "This action sends a vital message to credit union members and consumers that their federally-insured deposits in credit unions remain safe."