Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive


Inside Washington (10/21/2008)

 Permanent link
* WASHINGTON (10/22/08)--Reps.. Barney Frank (D-Mass.) and Maxine Waters (D-Calif.) have sent a letter to President Bush urging him to put Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair in charge of a government initiative for mitigation of foreclosures (American Banker Oct. 21). The federal lawmakers said Bair's work at the FDIC to reduce the number of mortgages that meet with foreclouser shows that she has the experience needed to lead a governmentwide effort. Also, placing one official--Bair--in charge of the initiative will improve the effectiveness of the federal government’s efforts, Frank and Waters wrote ... * WASHINGTON (10/22/08)--Brian Montgomery, Federal Housing Administration (FHA) commissioner, acknowledged some shortcomings with the FHA’s Hope for Homeowners program during a speech Monday (American Banker Oct. 21). He encouraged lenders to take part in the program, but noted that some homeowners would face a reduction in equity when the market turns around. Lenders in the audience also told Montgomery that they were having trouble qualifying borrowers for the program because their FICO scores were under 580. FHA plans to raise its minimum net worth requirements for FHA-Approved lenders to $1 million from $250,000 and to $75,500 for brokers from $63,000 by Jan. 20, Montgomery said. Hope for Homeowners was created in July and helps delinquent borrowers refinance ... * WASHINGTON (10/22/08)--Federal Reserve Board Chairman Ben Bernanke voiced support for another economic stimulus package Monday and said lawmakers should consider more steps to improve credit markets--such as guaranteeing loans or directly lending to borrowers. Bernanke said a second stimulus should be temporary and the government could consider paying the guarantee fees at Fannie Mae and Freddie Mac. He didn’t offer any specifics, but said easing credit access would promote economic growth and create jobs (American Banker Oct. 21) ...

Frank backs CUs in hearing statement

 Permanent link
WASHINGTON (10/22/08)—As he opened yesterday’s hearing on financial regulatory oversight in light of the country’s economic upheaval, House Financial Services Committee Chairman Barney Frank (D-Mass.) noted that credit unions “have absolutely no responsibility” for creating the current economic crisis. He said they deserve to be recognized for it. From there, the hearing went on for five hours to take a broad look at regulatory issues that broached the span of topics from the creation of the mortgage and housing crisis, the proper regulatory structure for the country’s financial institutions, the mortgage securitization process, and much, much more. The hearing was a continuation of an investigation begun by the committee in July, when the panel conducted two hearings focused on regulatory restructuring and systemic risk, during which the committee heard from regulators.

CUNA urges CU reg changes to help economy

 Permanent link
WASHINGTON (10/22/08)—As the U.S. Congress begins consideration of economic recovery legislation, Credit Union National Association (CUNA) President/CEO Dan Mica this week wrote to remind federal lawmakers they should increase credit unions’ ability to be part of the solution for problems faced by consumers and small businesses. In letters to the leaders of the Senate Banking Committee and the House Financial Services Committee, Mica highlighted several regulatory changes that he said should be considered as part of an economic recovery plan. The Oct. 15 letter said the recommendations “focus on maintaining credit unions’ strong capital levels by implementing robust regulatory tools and restoring credit unions’ ability to fully meet the needs of their small business members during and after the credit crunch.” The letter urged changes that would:
* Allow the National Credit Union Administration to implement a risk-based capital system for credit unions—similar to that of banks-- to help credit unions to better manage unexpected circumstances; * Eliminate the 12.25 % of assets credit union business lending cap as a means to provide much needed credit to America’s small businesses without costing taxpayers a dime; and * Permit all credit unions to accept secondary capital.
Mica wrote: “As the economy recovers from this crisis, credit unions will continue to be there for our members. We know credit unions cannot be the entire solution to the problems our economy faces, but we remain an important resource to credit union members; and data suggests that the existence of a strong credit union movement benefits all consumers.” CUNA sent the letter to the chairman of the Senate Banking Committee, Sen. Christopher Dodd (D-Conn.), and the committee’s ranking member, Sen. Richard Shelby (R-Ala.), as well as House Financial Services Committee Chairman Barney Frank (D-Mass.) and Rep. Spencer Bachus (R-Ala.), who is that panel’s ranking member.

CULAC sets record collections

 Permanent link
WASHINGTON (10/22/08)—With almost two-and-a-half months still to go in the current two-year federal election cycle, the Credit Union National Association (CUNA) reports that it has broken the 2005-2006 political fundraising record with $3.77 million raised to date. For the full two-year cycle ending Dec. 31, 2006, that figure was $3.75 million—itself a record at the time. CUNA also reports that it has contributed $2.4 million directly to candidates thus far in the 2007-2008 federal election period. That makes CUNA’s Credit Union Legislative Action Council (CULAC) the 13th largest political action committee (PAC) in terms of direct contributions to candidates and committees, based on the ranking done by the Center for Responsive Politics. CUNA ranks fifth largest among trade associations PACs. “Open-seat races are where CUNA and credit unions can really make a difference,” Trey Hawkins, CUNA political director, said Tuesday. He said that is where CUNA has concentrated its efforts. Hawkins explained that incumbents making a bid for re-election rarely are defeated. Therefore, the best opportunities for credit union support to have an impact are in races in which both candidates are making a new bid for the position. “We always urge credit unions to be active in their support of credit union-friendly candidates,” Hawkins noted, adding, “That message is certainly as important as ever during this time of financial and economic upheaval—when credit unions really need lawmakers who understand us as member-owned financial cooperatives.”