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CUNA completes 1st Minn.-based campaign school

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WASHINGTON (10/26/09)--Representatives from the Credit Union National Association (CUNA) this week completed another successful campaign school event, holding the latest in the series of educational sessions for over a dozen credit union professionals and volunteers in St. Paul, Minn. Attendees of the campaign school, the first held in the state, included local political aspirants such as a current city councilman and a Water and Soil Conservation District Supervisor. CUNA Political Director Trey Hawkins said that “one way credit unions can become more effective is to elect public officials who have a background in the credit union movement.” The need for legislators that understand the challenges faced by credit unions is made all the more important by the number of issues faced by credit unions at this time, including potential changes to interchange fees, the compliance burdens represented by the CARD Act, and potential changes to overdraft fee regulations. CUNA’s Senior Vice President of Political Affairs Richard Gose, who led much of the discussion at the campaign school, praised Minnesota credit unions for their “dedicated involvement in politics.” Attendees also heard behind the scenes stories from the candidacy process from Minnesota State Senator Chris Gerlach and State Representative Steve Simon. The campaign school was co-hosted by the Minnesota Credit Union Network (MnCUN). Successful graduates of previous campaign schools have gone on to win positions in West Virginia, Nevada, and Iowa. CUNA’s campaign schools are part of a continued effort to promote political involvement among credit union professionals and volunteers, and CUNA has currently scheduled a minimum of seven additional campaign schools in states throughout the nation during the 2009-2010 election cycle. CUNA also offers online courses for credit union representatives that are interested in political advocacy. Mara Humphrey, MnCUN Vice President-Governmental Affairs, echoed those sentiments in a press release, saying that “Minnesota credit unions’ increased involvement in politics has demonstrated that credit unions can have a significant impact on politics and can be prominent players in the election process.” “Through this Campaign School and our other political programs and activities, we are raising the political profile of Minnesota credit unions. Elected officials regularly turn to credit unions for support and viewing us as go-to resources for information on issues important to our movement,” she added.

Interchange changes would carry steep price for consumers CU CEO warns

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WASHINGTON (10/26/09)--NARFE Premier FCU President/CEO Anthony Walker has warned that “cardholders would pay a steep price” if merchants succeed in getting Congress to alter the current interchange fee structure. In a viewpoint published in American Banker, Walker, who leads the Alexandria, Virginia-based, $123-million-in-assets, 10,000-member credit union, said that while merchants claim that they are looking to protect consumers and offer them lower prices on items that they purchase from retailers, “what it's really about is protecting their profits and shifting costs to the general consumer.” While Merchant representatives that recently testified before the House Financial Services Committee said that their constituents would give back to consumers “in different ways, depending on things like costs, competition and their own economics,” Walker focused on one potential perk that the Merchants Payment Coalition reps promised for purchasers: “free gift wrapping.” Walker also detailed the “huge benefits” that merchants receive due to their acceptance of credit and debit cards, saying that they are able to “outsource their credit risk to financial institutions who issue those cards and are left ‘holding the bag’ if a customer doesn't pay their bill” at a price of “less than 2 cents on a dollar.” “Merchants get protection from fraud and theft, guaranteed payment, efficient record keeping and faster checkout,” and also benefit from “higher sales” since “consumers aren't constrained by the amount of cash they have in their wallet” when they make purchases, he added. Saying that interchange reflects a merchant's fair share of the costs of the convenient card system, the Credit Union National Association has fiercely opposed any merchant-proposed changes to the current interchange fee regime, and has launched its own interchange grassroots advocacy campaign which will advocate credit union views on interchange through thousands of postcards to Senators in Washington.

House committee schedules Friday hearing on overdraft bill

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WASHINGTON (10/26/09)--While legislation related to the CFPA and the CARD Act both passed through the House Financial Services Committee last week, there is still work to be done, and the path toward financial regulatory reform will march on when the full Committee holds a Friday morning hearing on The Overdraft Protection Act of 2009. Sen. Christopher Dodd (D-Conn.) has introduced overdraft legislation on the Senate side as well. Dodd’s bill, S. 1799, The FAIR Overdraft Coverage Act, would limit the fees that financial institutions can charge on overdraft protection services. House Financial Services Chair Rep. Barney Frank (D-Mass.) has also indicated that the CFPA could itself create new overdraft rules. The Federal Reserve Board is also drafting new rules on overdraft protection plans, and some in Congress, including Dodd, have expressed frustration with the regulators' efforts. A full Committee hearing on Systemic Regulation, Prudential Matters, Resolution Authority and Securitization is scheduled for Thursday morning. The Committee has not yet provided witness lists for either of these hearings. Financial Services Committee markups will take place earlier in the week, with debate on discussion drafts of H.R. 3818, the Private Fund Investment Advisers Registration Act of 2009, H.R. 3817, the Investor Protection Act of 2009, and the Accountability and Transparency in Rating Agencies Act set to take place on Tuesday morning. The Committee will also discuss a substitute amendment to H.R. 2609, the Federal Insurance Office Act of 2009, during this time.

Compliance Challenge Overdraft fee notification

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WASHINGTON (10/26/09)--In this month’s Compliance Challenge, the Credit Union National Association (CUNA) reminds credit union compliance managers that Federal regulations do not currently require credit unions to send a notice each time that courtesy pay fees or overdraft fees are charged to member accounts. “It is just considered a best practice to do so,” CUNA said. Citing the National Credit Union Administration’s (NCUA) recently issued Legal Opinion Letter No. 09-0608 regarding the Mailing of Insufficient Funds (NSF) / Overdraft Notices to Members, CUNA said that federal credit unions are not required to send a notice each time an NSF or overdraft occurs. However, CUNA added, the NCUA’s Truth in Savings rule does require credit unions to disclose any NSF and overdraft fees that are debited from a member’s account on that member’s periodic financial statement. The fees should also be itemized by fee type and dollar amount, according to the letter. The NCUA has also provided additional guidance on interagency best practices which recommends that federal credit unions promptly notify their members of any overdraft fees. However, this is only guidance and is not an actual regulatory requirement that is enforced by the NCUA. To see the full compliance challenge, use the resource link.

Inside Washington (10/23/2009)

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* WASHINGTON (10/26/09)--The success of the Federal Reserve Board’s proposed plan to govern executive compensation will depend on whether it changes the way bankers are paid (American Banker Oct. 23). The plan will change compensation only if it is coupled with a “say-on-pay” proposal to prevent risky compensation practices, said Cornelius Hurley, a former Fed lawyer. However, shareholders have not been a part of the discussion about executive compensation. The Obama administration has proposed giving shareholders a nonbinding vote on compensation, but the provision was not included in the Fed’s proposal. The proposal comes as Kenneth Feinberg, the Treasury Department’s “pay czar” introduced pay standards that would cut the salaries of the 25 highest-paid executives at Citigroup and Bank of America ... * WASHINGTON (10/26/09)--The Treasury Department will begin slowing the Troubled Asset Relief Program (TARP) and improving its focus on homeowners and small businesses, Herb Allison, Treasury assistant secretary for financial stability, told the Congressional Oversight Panel Thursday. Elizabeth Warren, panel head, said she was concerned about the financial markets because “many of the factors that caused the crisis remain in place” (American Banker Oct. 23). However, she said she was encouraged that Treasury plans to wind down TARP. Allison said the department would wind down the Capital Purchase Program and other key programs at the end of the year. Allison also noted that banks will repay another $50 billion to the TARP fund during the next year. The Treasury has already received more than $70 billion in principal repayments and $6.5 billion in other interest and fees from TARP participants ... * WASHINGTON (10/26/09)--The Federal Reserve may not lose credit on the emergency programs it used to fight the financial crisis, according to William Dudley, Federal Reserve Bank of New York president (Reuters Oct. 22). Dudley spoke at the Federal Reserve Bank of Boston’s annual conference. The Fed’s emergency facilities are naturally slowing, and the exit of some of the liquidity facilities is “going well,” Dudley said. Fed Vice Chair Donald Kohn echoed Dudley’s sentiments, saying that the liquidity facilities are “in the process of winding down without losses.” The Fed also is not likely to suffer losses when it sells the mortgage-backed securities it acquired during the crisis ...