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Inside Washington (10/27/2008)

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* WASHINGTON (10/28/08)--Fifteen financial institutions have signed up for a cash injection offer from the federal government to bolster the ailing banking sector (The New York Times and American Banker Oct. 27). The Treasury Department plans to fund up to 22 lenders in the $250 billion recapitalization program. JP Morgan Chase and Citigroup were among nine institutions to receive $125 billion of capital infusions two weeks ago. Other institutions that will use the government funds include: BB&T Corp., Capital One Financial Corp., PNC Financial Services Group, SunTrust Banks, Regions Financial Corp., KeyCorp, Comerica, Fifth Third Bancorp, State Street Corp., Northern Trust Corp., First Horizon National Corp., Huntington Bancshares, Washington Federal, City National Corp., Valley National Bancorp and First Niagara Financial Group ...

Reserve GAC hotel rooms beginning Nov. 6

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WASHINGTON (10/28/08)--Beginning Nov. 6 at 2 p.m. ET, those planning to attend the Credit Union National Association's (CUNA) 2009 Governmental Affairs Conference can reserve hotel rooms. Attendees can register online or by phone for the Feb. 22-26 event in Washington, D.C. The GAC offers 13 hotels near the convention center and shuttle service is provided Sunday through Thursday. Three options exist for reserving lodging through the housing bureau:
* Visit gac.cuna.org, and click on "Housing" for easy step instructions for making reservations; * Call 800-974-3084 Monday through Friday from 9 a.m.- 5 p.m. ET. * Beginning Friday, Nov. 7, reservations can be faxed to 800-521-6017 or 847-940-2386. Fax reservations are not accepted on opening day.
A $250 per room deposit, payable by major credit card, is required for all reservations at the time of booking. For complete instructions and a list of hotels, use the resource links for more information.

MBLs important to recovery CUNA tells lawmakers

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WASHINGTON (10/28/08)—If no longer restricted by a statutory business lending cap, credit unions likely could provide $10 billion of new credit to small businesses within the first 12 months of receiving new authority, according to the Credit Union National Association (CUNA). That would be in addition to the approximately $30 billion already in outstanding business loans provided by credit unions, CUNA noted. In letters being sent today to leaders of the House Committee on Small Business Committee, CUNA notes the infusion of funds by credit unions into small businesses would “provide much needed economic stimulus without costing the taxpayers a dime.” CUNA’s letter is being sent to Chairwoman Nydia Velazquez (D-N.Y.) and ranking minority member, Rep. Steve Chabot (R-Ohio) as the small business panel conducts a hearing today on “ Creating Opportunities for Small Business in Economic Recovery.” Over the almost 100 years of credit union history in this country, member business lending was unrestricted until the 1998 Credit Union Member Access Act (CUMAA, H.R. 1151). “Credit unions with business lending experience are in a position to assist small business owners. As a part of a comprehensive approach to make credit more available to small business owners, we encourage Congress to enact legislation eliminating the decade-old cap on credit union member business lending,” the CUNA letter says. “As the economy recovers from this crisis, credit unions will continue to be there for their members. “We know credit unions cannot be the entire solution to the problems we face, but credit unions stand ready, willing and able to assist in the recovery,” the CUNA letter says.

Treasury urged to back parity for non-interest accounts

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WASHINGTON (10/28/08)—The U.S. Treasury Department was urged by the Credit Union National Association (CUNA) to support full share insurance coverage of non-interest bearing transaction accounts. CUNA President/CEO Dan Mica sought Treasury Secretary Henry Paulson’s support to provide the same insurance coverage for credit unions’ non-interest accounts as has been provided by the Federal Deposit Insurance Corp. for insured banks and thrifts. Mica said it is CUNA’s view that the National Credit Union Administration (NCUA) has sufficient legal authority to establish a similar program for any federally insured credit union through the National Credit Union Share Insurance Fund. He added that CUNA "appreciates the fact that NCUA Chairman (Michael) Fryzel has communicated with you about this." Mica said CUNA is "concerned that there may be disadvantages for credit unions should the additional coverage not be provided." Previously, Mica had warned that failure to address this issue for credit unions could undermine “credit unions' hard-won success in serving small businesses and others in their communities."

NCUA attorney-client rule needs more clarity CUNA

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WASHINGTON (10/28/08)—A recent explanation by the National Credit Union Administration (NCUA) of its opinion on attorney-client privilege needs additional clarification, according to the Credit Union National Association CUNA), which requested the recently issued explanation. The agency acknowledged that it previously permitted credit unions to withhold from federal examiners records covered by attorney-client privilege because of an assertion that producing them could be read by the courts as having waived the privilege. However, the NCUA wrote in its Oct. 21 letter to CUNA, it will no longer permit credit unions to withhold privileged documents because of that assertion. The possibility of a court using the release of a privileged document to claim a credit union waived its attorney-client privilege was eliminated by the addition of Section 205(j) to the FCUA, the agency claimed. “This does not mean that it is no longer possible for a credit union to assert the attorney-client privilege against NCUA,” wrote Robert Fenner, NCUA General Counsel, in the agency letter. “However,” he added, “our experience has been that the waiver of privilege as to a third party was almost always the reason for asserting the privilege in the past.” CUNA Deputy General Counsel Mary Dunn said of the NCUA letter, “While CUNA appreciates NCUA’s efforts to clarify its information on this topic, we believe unanswered questions remain about the application of the NCUA opinion.” Dunn said CUNA will follow up with the NCUA.

CUNA will pursue lawyers account coverage issue

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WASHINGTON (10/28/08)—The Credit Union National Association (CUNA) said Monday it will follow up with the National Credit Union Administration (NCUA) on its recent opinion letter on insurance coverage on Interest on Lawyers' Trust Accounts (IOLTA). The accounts in question are those set up by lawyers at a credit union or bank to hold funds for their clients. Often, the interest accrued is paid to the state or the state bar association to fund legal services for those who cannot afford them. In response to an inquiry by the Wisconsin Office of Lawyer Regulation, the NCUA stated its opinion that all clients who have funds represented in an IOLTA must be members of the credit union holding the account. The exception to this, according to the agency, would be accounts deposited in a low-income credit union, which can accept nonmember funds. Those accounts would provide share insurance coverage for all the clients. CUNA Deputy General Counsel Mary Dunn said Monday that this situation puts credit unions at a disadvantage to attract this type of account if all the clients must be members, rather than just the attorney establishing the account. Dunn said that CUNA has discussed this issue with the agency and will continue to pursue further discussions. Use the resource link below to read the NCUA letter.