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Washington Archive

Washington

Inside Washington (10/06/2009)

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* WASHINGTON (10/7/09)--The Department of Veterans Affairs (VA) has asked financial institutions to honor emergency advance education payments that have been issued as checks from U.S. Bank. These checks, which began being issued last Friday, are for combat veterans to pay their educational benefits for the 2009 school term, and will be accompanied by a letter from the VA that validates the legitimacy of the check. According to the Credit Union National Association, some credit unions have questioned the validity of these checks, as they are drawn to U.S. Bank rather than the Department of the Treasury, as usual. Financial institutions that want to verify a given check may do so by contacting the VA at 1-800-827-2166. Additional contact information may be found at www.va.gov .... * WASHINGTON (10/7/09)--The financial services industry needs to either support a proposed consumer protection agency, or prepare to be overrun by individual financial reforms that would affect credit cards, overdrafts and interchange fees, policy analysts say (American Banker Oct. 6). Bankers continue to oppose the creation of a consumer agency, but House Financial Services Committee Chairman Barney Frank (D-Mass.) said last month they need to pick their battles. Frank said he plans to continue pushing individual reforms until an agency is created. The chairman also is conducting a hearing Thursday on card reform and interchange fees. Meanwhile, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) is expected to introduce legislation that would restrict overdraft fees. Consumer advocates say policymakers should keep pressure on the banks. The credit card industry “deserves a kick in the head for what they are doing,” said Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group. If Frank wants to go “a la carte” for awhile on reforms, he has the group’s support, Mierzwinski added ... * WASHINGTON (10/7/09)--A version of a derivatives regulation bill, by House Financial Services Committee Chairman Barney Frank (D-Mass.), would give financial institutions and others more flexibility to use derivatives for hedging purposes without sending them through a clearing house. In comparison, a Treasury draft of a bill submitted to Congress in August would require all end user firms to use a clearing house unless they could show the derivative would be used to hedge against risk. Though Frank’s bill is more flexible, larger banks may not support it because they would still have to fulfill clearing and exchange-trading requirements (American Banker Oct. 6). Financial observers also say it would hurt dealers’ profits. The bill appears to have won the support of moderate Democrats, but it’s unclear what members of the House Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC), think about the matter. A hearing is scheduled for today to further discuss the bill. CFTC Chairman Gary Gensler is slated to testify ...

Federal consumer panel meeting to focus on CARD Act

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WASHINGTON (10/7/09)--The Federal Reserve Board’s Consumer Advisory Council (CAC) has scheduled proposed rules to implement the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 as one of several topics of discussion for its next meeting, which will take place on Oct. 22. According to the Fed’s notice, the complete CAC agenda also includes discussion of proposed rules regarding disclosures related to closed-end mortgages and home-equity lines of credit and potential consumer protections for home-secured credit. Foreclosure issues will also be discussed during the meeting, with a particular focus falling on loss mitigation efforts, the Obama administration’s Making Home Affordable program, and other topics. Other items may be added to the agenda, if requested by CAC members. Parties that wish to present their views to the CAC on these topics may send written statements to Jennifer Kerslake, Secretary of the Consumer Advisory Council, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. The Credit Union National Association earlier last month nominated American Southwest CU President/CEO Brian Barkdull to represent credit union interests on the 30-member CAC panel.

New Web page celebrates creation of CUNA

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WASHINGTON (10/7/09)--Videos of the inspirational speeches given at the 75th anniversary of the founding of the Credit Union National Association (CUNA), recorded by CUNA staff, are now up and ready for viewing on the CUNA website. The speeches and a recreation of a historic photo of CUNA's founders took place at the Sept. 16 commemoration of CUNA’s founding. Current credit union leaders and descendants of credit union pioneers met in Estes Park, Colo., the original location where American credit union pioneers developed and ratified the original CUNA charter three-quarters of a century before. The commemoration of CUNA’s founding was marked by speeches, a celebratory toast, dedication of a new plaque commemorating the founding of the nation’s largest credit union organization, and the restaging of an iconic photo of CUNA founders taken in 1934, featuring credit union movement officials, supporters and officers of today. Speaking at the event were CUNA President/CEO Dan Mica; CUNA Chairman Kris Mecham; American Association of Credit Union Leagues Chairman Rosie Holub; Kathy Pelletier, granddaughter of CUNA founder and first Managing Director Roy F. Bergengren; and Catherine and Bill Herring, children of CUNA founder and movement pioneer Louise McCarren Herring. The videos, as well as a downloadable photo of those who joined to recreate the iconic photo of the founders of CUNA, can be viewed at the new CUNA web page. To view the new web page, use the resource link.

Mica touts CU difference in Bloomberg TV interview

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WASHINGTON (10/7/09)--Public demand and congressional action could force banks to adopt many of the conservative, pro-consumer business practices currently employed by credit unions, but credit unions will still be “driven by a different motive” than that of banks, Credit Union National Association President/CEO Dan Mica said during a Monday appearance on Bloomberg TV.


While banks will never be confused with credit unions, they may have to “pay more attention to what consumers want and not just what shareholders want,” Mica added. Mica also commented on the democratically owned-and-operated nature of credit unions, which is “clearly very different” from the way that the shareholder-beneficial banking industry is set up. More specifically, Mica highlighted the beneficial lending and mortgage rates that credit unions have always provided to their members, as well as the strong 10% capitalization ratios that are currently held by credit unions. Mica also touted recent increases in mortgages, which are up by 8% for credit unions, and member business lending, which he said has increased by 14%. “All in all, we are out there lending, and that is what this economy needs,” Mica added. While the exact format of the proposed Consumer Financial Protection Agency will likely change as it moves through the legislative process, Mica said that Congress “will almost certainly get something out,” as there is a strong will among some congressional leaders, Treasury Secretary Timothy Geithner, and President Barack Obama to create the new agency.