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Space still open for todays Dan Mica webinar

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WASHINGTON (11/19/08)--Affiliated credit unions can still register to participate in a special live nationwide webinar featuring Credit Union National Association (CUNA) President/CEO Dan Mica, today at 2 p.m. ET. The event will address the challenges presented to credit unions as a result of the financial crisis. The medium also will allow credit unions to correspond directly with Mica during the event. The Internet-based video conference is open to all CUNA-affiliated credit unions at no charge. Among the topics to be discussed:
* How the stage is set for a "working majority" in the Congress; * The opportunities and challenges ahead for credit union--including secondary capital, prompt corrective action reform, member business lending, protecting credit unions' regulatory structure/insurance fund, leveraging the "white hat" image to help members and the country; * The value of "credit union unity of purpose" and * CUNA’s vision of how that purpose can be achieved.
Affiliated credit unions can register, as well as hear directly from Dan Mica about today's webinar by clicking on the image below.
Click to view video (affiliated credit unions only)

Twenty-six corporates in NCUA liquidity program

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ALEXANDRIA, Va. (11/19/08)--The National Credit Union Administration (NCUA) Tuesday posted its list of 26 corporate credit unions that are participating in the agency’s Temporary Corporate CU Liquidity Guarantee Program (TCCULGP). On Oct.16, the NCUA approved the guarantee program, under which its National Credit Union Share Insurance Fund will provide a 100% guarantee on new unsecured debt obligations. All corporates were automatically covered for debt obligations issued through Nov. 17, 2008. However, they were then able to elect to opt out of the program by providing notice to the NCUA Office of Corporate Credit Unions. The NCUA’s list appeared to carry the names of all but one of the corporate credit unions, including the “corporates’ corporate”--U.S. Central. To qualify under the program, a debt obligation must be issued by eligible corporate credit unions on or before June 30, 2009, and mature on or before June 30, 2012. Included are promissory notes, commercial paper, inter-bank funding, and any unsecured portion of secured debt, according to the agency announcement. Under the plan:
* The amount of debt obligations covered by the guarantee per eligible corporate credit union may not exceed the greater of: * 100% of the eligible corporate credit union's maximum unsecured debt obligations outstanding during the period Sept. 30, 2007 through Sept. 30, 2008; * An amount determined by written approval of the agency's director of the Office of Corporate Credit Unions, with the prior concurrence of its director of the Office of Examination and Insurance, not to exceed $100 million; or * An amount determined by the NCUA board.
Use the resource list below to access the list of participating corporate credit unions or to read more about the program.

CUs get Paulson nod for lending efforts

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WASHINGTON (11/19/08)—With all that is on his mind these days, U.S. Treasury Secretary Henry Paulson still managed to give credit unions the nod Tuesday for their continued lending efforts during the country’s current credit squeeze. Paulson was testifying before the House Financial Services Committee on the government’s economic stimuli efforts under the Emergency Economic Stabilization Act. He appeared before the panel along with Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair. Rep. Tom Price (R-Ga.), during a question period after Paulson’s testimony, said he had many smaller institutions in his district, such as credit unions and community banks, that would like to have access to TARP capital. Although he did not address credit union access to the TARP plan, Paulson did reply that they, in part, are key and will do a lot of lending. The Credit Union National Association (CUNA) has been asking federal lawmakers, as they consider additional economic recovery legislation, to increase credit unions' ability to be part of the solution for problems faced by consumers and small businesses. In letters to the leaders of the Senate Banking Committee and the House Financial Services Committee, CUNA has highlighted several regulatory changes it urges should be considered as part of an economic recovery plan. The letters recommend changes that would:
* Allow the National Credit Union Administration to implement a risk-based capital system for credit unions—similar to that of banks-- to help credit unions to better manage unexpected circumstances; * Eliminate the 12.25 % of assets credit union business lending cap as a means to provide much needed credit to America's small businesses without costing taxpayers a dime; and * Permit all credit unions to accept secondary capital.
(See related story: CUNA keeps CU message before Congress.)

CUNA keeps CU message before Congress

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WASHINGTON (11/19/08)—As the U.S. Congress investigates the evolving nature of the Treasury Department’s Troubled Asset Relief Program (TARP), the Credit Union National Association (CUNA) is keeping the message before key lawmakers that credit unions must be included in any assistance plan. CUNA backs a plan under which the National Credit Union Administration would develop a "shadow TARP" program for credit unions that would purchase mortgage loans and mortgage-related assets from credit unions, but wants backup funding from the Treasury if necessary. In advance of yesterday’s House Financial Services Committee oversight hearing on the Bush administration’s actions to restore economic stability, CUNA wrote to the panel’s chairman, Rep. Barney Frank (D-Mass.), and its ranking member, Rep. Spencer Bachus (R-Ala.), to press the case for credit union inclusion. Last week, Treasury announced it would abandon its plan to purchase troubled assets from financial institutions in favor of greater emphasis on capital infusions into financial institutions. That shift, said the CUNA letter, causes credit unions concern. “Although the Emergency Economic Stabilization Act explicitly includes America’s credit unions among the institutions eligible to participate under the (TARP) plan, the implementation of the program thus far has not included credit unions, and the Treasury’s announcement makes it unclear how credit unions will be included,” wrote CUNA President/CEO Dan Mica. Mica stressed, “We hope that no credit union will need to turn to Treasury or NCUA for assistance. However, should the need arise, it is critical that the mechanisms Congress has put in place through the enactment of the Emergency Economic Stabilization Act work for credit unions as well as banks and other entities.”

Inside Washington (11/18/2008)

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* WASHINGTON (11/19/08)--The Government Accountability Office (GAO) is slated to release a report Dec. 2 on the Troubled Asset Relief Program (TARP). The GAO and the Financial Stability Oversight Board supervise TARP. Two other TARP supervisors are not yet in place (American Banker Nov. 18). Neil Barofsky, assistant U.S. attorney for the Southern District of New York, was confirmed as a TARP special inspector general at a hearing Monday. He will testify before the Senate Banking Committee and then the Senate will vote on his nomination ... * WASHINGTON (11/19/08)--The Federal Deposit Insurance Corp. is scheduled to meet Friday to finalize a rule regarding the temporary liquidity guarantee program. The program, introduced last month, is intended to give corporate credit unions competitive standing in the market (News Now Oct. 17) ... * WASHINGTON (11/19/08)--Those responsible for the mortgage market crisis should go to jail, Kenneth Donohoe, inspector general at the Department of Housing and Urban Development, told attendees of a mortgage fraud conference in Washington, D.C., last week. He noted his concerns regarding the Federal Housing Administration’s (FHA) ability to take on the refinancing load (American Banker Nov. 18). A penalty of $100 million in fines and 30 years in prison for defrauding the agency could save the FHA, he said. Prohibiting down payments assistance to borrowers or anyone involved with the loan also could help, because down payment assistance is a magnet for fraud schemes, Donohoe said ... * WASHINGTON (11/19/08)--Privately held financial institutions are eligible for funds in the Treasury Department’s capital purchase program, the department said Monday. To collect, institutions must apply by Dec. 8. Public institutions had until Friday to apply. The Treasury has invested $158.6 billion in 29 institutions (Financial Week Nov. 18). Privately held institutions follow similar rules to public institutions but the Treasury can only buy an additional 5% of underlying shares compared with 15% in public institutions ... * WASHINGTON (11/19/08)--National Credit Union Administration Vice Chair Rodney Hood last week presented the National Association of Realtors with its federal credit union charter at the association’s annual meeting in Orlando, Fla. Realtors FCU, Rockville, Md., is slated to open next year. From left are Dick Gaylord, president of the National Association of Realtors; Dale Stinton, CEO, National Association of Realtors, and Hood. (Photo provided by the National Credit Union Administration) ...

NCUA announces mortgage help plan for CU members

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ALEXANDRIA, Va. (11/19/08)—National Credit Union Administration (NCUA) Chairman Michael Fryzel unveiled an initiative Tuesday to help credit union members, who are experiencing mortgage-related financial difficulties, preserve their homeownership. The proposed new program, called Credit Union Homeowners Affordability Relief Program (CU HARP), would allow the NCUA, through its Central Liquidity Facility (CLF), to work with credit unions and their members to temporarily lower monthly mortgage payments. In addition to NCUA Board approval, the agency said CU HARP must also receive sign off by the U.S Treasury Department and the Federal Reserve Board. According to an NCUA announcement, the CLF would provide credit unions with funds, borrowed from the Treasury, at lower rates than otherwise available through private sources. In turn, credit unions are expected to pass the entire rate reduction to struggling low- and moderate- income borrowers. The credit union, in exchange for the reduced likelihood of borrower default on the mortgage, would also match the rate break, doubling the benefit to struggling homeowners, Fryzel said of the plan. The agency said CU HARP will be administered at no cost to taxpayers: CLF loans are made to credit unions on a fully secured basis, and all advances received by the CLF will be repaid to the Treasury’s Federal Financing Bank, with interest. The program will receive initial funding of $2 billion. A credit union would have the option of setting the period of the rate break, from three to five years, and would be able to create a 40-year maturity and/or reduce the principal balance to increase mortgage affordability, said the agency announcement. “My principal reason for advancing CU HARP is simple: The consumer must not be left out of the broader government efforts to mitigate the housing and credit market dislocations,” stated Fryzel. “CU HARP is an effort to foster a solution whereby the NCUA and credit unions work together to assist distressed borrowers. It represents what I believe to be an innovative and practical use of federal homeowner assistance that will also benefit credit unions and the market. “At the same time, the standards and requirements for CU HARP participation will be stringent and will enable NCUA to be responsible stewards of any public funds used. CU HARP will be a ‘win-win’ for all involved,” the chairman added. Borrowers participating in CU HARP would be subject to eligibility standards, including income level, default or danger of default, and required occupancy. The Credit Union National Association (CUNA) welcomed the NCUA’s proposed innovation. CUNA President/CEO Dan Mica said, “Although credit unions did not make the kind of mortgages that have done so much harm to borrowers, many credit union members are suffering because of a weak economy and collapsing housing markets. “This plan – a product of creative thinking -- is a welcome addition to the tools credit unions are already using to help their members face down financial challenges. In fact, some credit unions that many of these members belong to could likely benefit from assistance themselves.” He added that a further, welcome addition would be for the agency to adopt a ‘troubled asset relief program’ “for credit unions, by credit unions – to help those credit unions in distressed areas that are bearing the brunt of the collateral damage from the real estate crash.”