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Washington Archive

Washington

Online NCUA Town Hall set for Oct. 22

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ALEXANDRIA, Va. (10/6/09)—The National Credit Union Administration reported that more than 130 attended its final of three Town Hall-style meetings to gather credit union comment on regulatory issues. The final meeting was held yesterday in San Diego, Calif. For those unable to attend any of the live Town Hall meetings, NCUA Chairman Deborah said she will host an online webinar Oct. 22 at 3 p.m. Sign up information will be posted on the NCUA website later this week. Matz said in a release that she considered the live meetings “invaluable in providing a forum for real dialogue and genuine input to the regulatory process." Matz added, "As NCUA moves forward with rulemaking on corporates, I am confident that the information and suggestions garnered will become a key ingredient in what I expect to be a strong and durable new rule. And the discussions regarding the variety of other relevant issues such as member business loans, the examination process and alternative capital have added new dimensions to our assessment of those topics as well." The first live meeting was held in St. Louis, Mo. on Sept. 15, and the second last week in National Harbor, Md., which is in the Washington, D.C. area.

CUNA backs lawmakers urging for UIGEA delay

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WASHINGTON (10/6/09)—At a time of economic crisis, it is too great a burden on regulators and the financial services industry to move ahead with rules to implement the Unlawful Internet Gambling Enforcement Act (UIGEA), according to a bi-partisan coalition of 19 lawmakers. House Financial Services Committee Chairman Barney Frank (D-Mass.) and 18 other members of that panel sent an Oct. 1 letter to the heads of the U.S. Treasury Department and the Federal Reserve Board, the agencies charged with implementing UIGEA. The lawmakers requested the UIGEA effective date be pushed back a year. Credit Union National Association (CUNA) President/CEO Dan Mica Monday applauded the committee’s letter urging delay. “While CUNA supports efforts to eliminate payments to unlawful Internet gambling businesses, we have consistently raised concerns about impractical aspects of UIGEA,” Mica said in a letter addressed to Frank and circulated to Treasury Secretary Timothy Geithner and Fed Chairman Ben Bernanke, as well as National Credit Union Administration Chairman Deborah Matz. Under the Internet gambling law, credit unions, as well as other financial institutions, must establish and implement policies and procedures to identify and block restricted transactions, or rely on those established by the payments system. In the committee’s letter to Geithner and Bernanke, the lawmakers acknowledged that the regulators did not seek the task of implementing what has always been a controversial law. “We…believe this is an unreasonable burden on regulators and the financial services industry at a time of economic crisis, and it contradicts the stated intent of the Financial Services Committee,” the letter stated. CUNA opposes the agencies' draft implementation proposal. Also, CUNA testified against the plan at a House Financial Services Committee hearing in April. CUNA witness Harriet May, president/CEO of GECU, El Paso, Texas, reiterated CUNA's concerns that aspects of the proposal would be difficult, if not impossible, to implement. May also said financial institutions could be swamped by the compliance burdens associated with UIGEA. The current plan to implement the complicated law, she said, lacks clarity and sufficient definition of terms. The lawmakers’ correspondence also referenced H.R. 2266, a currently pending bill that would push the UIGEA compliance date back to Dec. 1, 2010—one year from the current date. Without predicting the outcome, the letter states, “We believe this legislation is likely to move.”

Inside Washington (10/05/2009)

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* WASHINGTON (10/6/09)--A delegation of 16 individuals representing 15 credit unions recently spent two days in Washington, D.C., lobbying legislators as a part of the Illinois Credit Union League’s annual "Hike the Hill” event. The delegates attended a presentation by Rep. Peter Roskam (R-Ill.) at Credit Union House, and participated in a briefing with Credit Union National Association legislative and public affairs staff.
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The credit union representatives then traveled to Capitol Hill to meet with their lawmakers and discuss their opposition to interchange fees and Community Reinvestment Act regulation for credit unions. They also talked about support for increasing member business lending caps and maintaining the National Credit Union Administration (NCUA) as the independent federal credit union regulator. In addition, the group met with Sen. Richard Durbin (D-Ill.) and attended an NCUA board meeting. “Our political success over the years has been due in large part to organized events to educate lawmakers about credit unions,” said Dan Plauda, Illinois league president/CEO. “This year’s ‘Hike the Hill’ was another opportunity for attendees to visit their federal lawmakers and NCUA regulatory officials to maintain a strong political and regulatory future.” Pictured are the Illinois representatives in front of Credit Union House. (Photo provided by the Illinois Credit Union League) ... * WASHINGTON (10/6/09)--House Financial Services Committee Chairman Barney Frank (D-Mass.) circulated a discussion draft of legislation that would regulate over-the-counter (OTC) derivatives. Frank also said that the committee will schedule a hearing for Wednesday to discuss the reform of the OTC derivatives market and the discussion draft, which was released Friday ... * WASHINGTON (10/6/09)--Financial services representatives are debating whether a single bank regulator could threaten the dual banking system (American Banker Oct. 5). Community bankers and Federal Deposit Insurance Corp. Chairman Sheila Bair say that a single regulator would focus attention on the nation’s largest institutions, which could disadvantage smaller banks. They also argue that eventually, banks would not have a reason to opt for a state charter since they would have an additional regulator but no benefits of a national charter. However, single regulator proponents--like Senate Banking Committee Chair Christopher Dodd (D-Conn.)--say that a single regulator can be created without disadvantaging small financial institutions. The end of a dual banking regulator is just a scare tactic, said Lawrence Kaplan, a lawyer at Paul, Hastings, Janofsky and Walker LLP. It’s unlikely anyone would get rid of state regulation, he said. Kip Weissman, a partner at Luse Gorman, added that a single regulator would weaken the state charter, so companies would switch to a federal charter. However, Doug Elliot, Brookings Institution economic studies fellow, said the concerns are just a “resistance to change.” Dodd has assured credit unions that plans for a single regulator would not apply to credit unions (News Now Sept. 30) ...

Congress this week CUNA to testify on interchange CARD Act

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WASHINGTON (10/6/09)—Among items of interest on Capitol Hill for credit unions this week, Mark Caverly of Local Government FCU is scheduled to testify Thursday at a hearing on interchange fees. He will speak on behalf of the Credit Union National Association (CUNA) and the Electronic Payments Coalition. Caverly, executive vice president of the Raleigh, N.C.-based credit union, will testify before the House Financial Services Committee on H.R.2382, the Credit Card Interchange Fees Act of 2009 and H.R. 3639, the Expedited CARD Reform for Consumers Act of 2009. The proposed interchange bill would amend the Truth in Lending Act to prohibit certain electronic payment system network practices and required increased disclosures. The Credit Union National Association (CUNA) has publicly stated that changing the current interchange fee structure, as some merchants, including 7-Eleven, have promoted doing, would adversely limit consumer options, competition and technological innovation. CUNA believes interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants and discussions regarding what value should be placed on the use of electronic payments should be within the purview of the industry participants. Legislation that would allow merchants to negotiate interchange fees has also been introduced in the Senate, but it is expected that neither H.R. 2382 nor the Senate-based legislation will be brought up for a vote during the fall session. Regarding H.R. 3639, that bill would move up the effective date of some portions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act to December of this year. Bill sponsor Rep. Carolyn Maloney (D-N.Y.) has said that the "breadth and depth" of interest-rate hikes that credit card companies are imposing ahead of the full imposition of the CARD Act points to the need for "faster consumer protections." Ryan Donovan, CUNA vice president of legislative affairs, has said the outlook for the legislation is uncertain. "The legislation seeks to move a February effective date up to this December, which is only about 10 weeks from now. In order for the bill to become law in that timeframe, it would seem that the bill would need to move through the legislative process at incredible speed," he noted. Other items of credit union interest on Capitol Hill this week included:
* On Tuesday, a Senate Small Business and Entrepreneurship Committee hearing titled The Recovery Act for Small Businesses: What is Working and What Comes Next?; * On Wednesday, a Senate Banking subcommittee hearing titled Securitization of Assets: Problems and Solutions; * On Thursday, in addition to Caverly’s appearance before House Financial Services, the Senate Banking Committee hearing will look at "The Future of the Mortgage Market and the Housing Enterprises”; and * On Friday, a different Senate Banking subcommittee has scheduled a hearing on the topic of restoring credit to manufacturers.
CUNA is a member of the Electronic Payments Coalition.