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Washington Archive

Washington

Inside Washington (10/27/2009)

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* WASHINGTON (10/28/09)—The House Financial Services Committee made the following series of announcements late Tuesday. The committee and U.S. Treasury Department released draft legislation to address the issue of systemic risk and “too big to fail” financial institutions. The draft bill would: Create a monitoring system intended to reduce the threats that systemically risky firms pose to the financial system; establish a process closing large, financially troubled nonbank financial institutions in a way minimizes impact on U.S. taxpayers and the financial system; and overhaul the country’s financial regulatory system. The committee also voted 67-1 in favor of the Private Fund Investment Advisers Registration Act of 2009 (H.R. 3818), a bill to require more financial providers to register with the Securities and Exchange Commission. The committee reconvenes today to continue consideration of the discussion draft of the Accountability and Transparency in Rating Agencies Act and the discussion draft of the Investor Protection Act of 2009… * WASHINGTON (10/28/09)--National Credit Union Administration (NCUA) board member Michael Fryzel visited with Mark E. Easton, deputy chief financial officer for the Department of Defense, and Arty Arteaga, president/CEO of the Defense Credit Union Council, in Washington, D.C. They discussed credit unions’ products and services for military members. “Credit unions located on our military bases and at Department of Defense facilities across the globe, are dedicated to providing financial services to the millions of men and women who serve our country,” Fryzel told the group. Arteaga, Easton and Fryzel also talked about pending congressional actions on credit card issuers, returned checks and consumer protection that would affect credit unions ... * WASHINGTON (10/28/09)--The Missouri Credit Union Association (MCUA) traveled to Washington, D.C., Oct. 21-22 to meet with its federal lawmakers. MCUA Senior Vice President of Public and Legislative Affairs Peggy Nalls, and Vice President Amy McLard followed up on several issues credit unions raised with their lawmakers in August and September. These included the Credit Card Accountability, Responsibility and Disclosures Act; small business lending; the proposed consumer financial protection agency; interchange fees and the Community Reinvestment Act. MCUA met with Rep. Ike Skelton (D); staff of Sens. Christopher Bond (R) and Claire McCaskill (D); U.S. Rep Russ Carnahan (D); U.S. Rep Emanuel Cleaver (D); Rep. Roy Blunt (D) and staffer Brian Diffel; U.S. Rep. Blaine Luetkemeyer (R) and staffer Chris Brown; and staffers from the offices of U.S. Reps. Todd Akin (R), William Clay (D), Jo Ann Emerson (R) and Sam Graves (R). From left are Nalls (left) and Rep. Skelton. (Photo provided by the Missouri Credit Union Association) ... * WASHINGTON (10/28/09)--Regulators are divided on how to boost the Federal Deposit Insurance Corp.’s (FDIC) Deposit Insurance Fund (DIF). During a meeting, FDIC Chairman Sheila Bair said she supported requiring banks to pre-pay three years’ worth of premiums to funnel $45 billion into the fund (American Banker Oct. 27). John Dugan, comptroller of the currency, and John Bowman, acting director of the Office of Thrift Supervision, said it would be better if banks could pay the assessment over time. Jim Marcuccilli, president/CEO of Star Financial Bank, Fort Wayne, Ind., said the DIF should be infused by a credit line from the Treasury. Two other FDIC board members, Marty Gruenberg and Tom Curry, are expected to support the pre-pay assessment plan. Comments on it are due today ... * WASHINGTON (10/28/09)--Critics of the regulatory reform plan that would place power into one agency should be focusing on the Treasury Department instead of the Federal Reserve Board, financial observers say (American Banker Oct. 27). The Treasury could end up overseeing systemic risk, according to several proposals in Congress. Giving the Treasury a bigger role could ignite political concerns, some observers say, but others say giving Treasury a more direct role makes sense. Douglas Elliott, Brookings Institution fellow, says Treasury will always have the authority in a systemic failure because taxpayers will have to back up the failed institution. The Treasury also could have a hand in deciding which systemically risky firms go into receivership. The Obama administration has proposed giving Treasury the authority to appoint an agency to be the receiver for a systemically important institution. However, critics say that would give the Treasury too much authority. Phillip Swagel, former Treasury assistant secretary for economic policy in the Bush administration, says he disagrees with allowing Treasury to spend money without congressional approval ...

CU comments on Fed Card Act rule due soon

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WASHINGTON (10/28/09)--As the Credit Accountability, Responsibility and Disclosure (CARD) Act continues to come under the spotlight on Capitol Hill, it also is the focus of some upcoming regulatory actions. Credit unions have until Nov. 20 to comment on a Federal Reserve Board plan to implement portions of the CARD Act. The proposal addresses provisions of the CARD Act that limit minimum payment warnings to credit cards and prohibit interest rate increases for existing balances and during the first year the account is opened. The Fed has also asked for input on portions of the act that require the consent of consumers before fees can be charged on over-the-limit accounts and require co-signors for cardholders less than 21 years of age, unless they can prove that they can make the minimum payments. In Congress, the compliance date of certain CARD Act provisions could be moved up for some issuers to Dec. 1 by a bill approved by the House Financial Services Committee. An amendment that would exempt depository institutions with under 2 million credit cards in circulation from the expedited effective dates contained in the bill, offered by Rep. Shelley Moore Capito (R-W.V.) and Rep. Brad Sherman (D-Calif.), was added to the legislation via voice vote. Sherman also joined Rep. David Scott (D-Ga.) to offer an amendment to strike from the bill the expedited effective dates for gift cards. This amendment was also added via voice vote. The Senate may also soon take up H.R. 3606, the CARD Act Technical Corrections Act, which, if passed by the Senate and signed into law by the President, would clarify that a 21-day disclosure requirement for late payments applies only to credit card accounts and not to all open-end credit. The Credit Union National Association has also requested comments on the Fed proposal from credit union industry insiders in a recently published comment call. CUNA is accepting comments until November 10, 2009. To see the CUNA comment call, use the resource link.

Dodd rate-freeze bill may move quickly to a vote

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WASHINGTON (10/28/09)--Legislation that would freeze credit card interest rates and fees until the recently-passed Credit Card Accountability, Responsibility and Disclosure (CARD) Act comes into full effect has been fast tracked and could soon be voted on in the Senate. Commenting on S.1927, introduced on Monday, Sen. Chris Dodd (D-Conn.) said that the bill was an effort to combat the practices of credit card companies that “have been jacking up rates in a last ditch effort to squeeze customers before all of the bill’s provisions can take effect.” The legislation would end many of the abuses of credit card companies that are “looking for ways to get around the protections this Congress and the American people demanded” and would “further protect customers today,” Dodd added. The Credit Union National Association is currently analyzing the legislation. "We're taking a look at the bill and talking with our members about the potential impact if would have on their operations," said Ryan Donovan, vice president of legislative affairs. The House Committee recently passed legislation that accelerates the effective date of the CARD Act from Feb. 22 to Dec. 1, and that legislation is awaiting a vote in the full House or Representatives. CUNA worked with legislators to add an amendment that would exempt depository institutions with under 2 million credit cards in circulation from the expedited effective dates contained in the bill. CUNA also supported an amendment that would strike expedited effective dates for gift cards from the bill.

NCUA slates free Nov. 18 MBL webinar

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Alexandria, Va. (10/28/09)—The National Credit Union Administration (NCUA) Tuesday announced a Nov. 18 webinar to outline the regulators’ perspective on member business lending. The 90-minute webinar, starting at 1 p.m. ET, is free and open to the public. The session, the agency said in its announcement, will draw from the diverse expertise at the NCUA Central Office, NCUA Regional Offices and state regulators. It will provide “guidance, best practices and insight into examination of member business lending,” and the session will be interactive with Q-and-A an integral part of the presentation. The agency moderator will be board member Gigi Hyland. NCUA Panelists include:
* Linda Jekel, director of Credit Unions for the state of Washington, Division of Credit Unions; *Erika Eastep, Member Business Lending Program Officer, Office of Examination and Insurance, NCUA; and * Linda Vick, Agricultural and Commercial Lending Specialist, Region IV, NCUA.
A registration link for the webinar will be posted online at www.ncua.gov with the next few days.

30-year mortgage rate drops reports FHFA

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WASHINGTON (10/28/09)—The average interest rate on conventional 30-year, fixed-rate, mortgage loans of $417,000 or less dropped by seven basis points in September, down to 5.23%, the Federal Housing Finance Agency (FHFA) reported yesterday. The rate for shorter-term loans--15-year, fixed-rate loans of $417,000 or less—averaged an increase of 15 basis points, up to 4.77%. In its Monthly Interest Rate Survey for September , the FHFA also reported:
* The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 5.15%, which was down from 5.23% in August; and * The effective interest rate, reflecting the amortization of initial fees and charges, was 5.24%, a decrease of nine basis points from 5.33% the month before;
The average loan-to-price ratio was 74.5%, a slight drop from August when it was 74.6% , and the average loan amount decreased by $9,400 to $212,400 in September. Use the resource link below to read more.