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Washington

The day after iNatl Journali looks at results

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WASHINGTON (11/3/10)—Four hundred attendees from many walks of Washington, D.C. life are expected to arrive this morning at the National Journal’s analysis of the Nov. 2 mid-term elections, a session co-sponsored by the Credit Union National Association (CUNA).
The half-day event, which will be webcast live, will feature National Journal editorial staff for an intensive look the likely impact election results will have on the U.S. Congress, the government’s executive branch, the “K Street” lobbying faction, and the most important policy issues of the day. The conference is designed to include thought-provoking keynote speakers as well as comprehensive analysis from National Journal’s,” Charlie Cook, Ron Fournier, Major Garrett, Sue Davis, Matt Copper, Jason Dick and the Hotline staff. Also in today’s News Now, CUNA takes a credit union-centric look at the elections. Use the resource link below for the National Journal Webcast.

NCUA should give new corporates leeway says CUNA

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WASHINGTON (11/3/10)--While supporting its proposed new policy on field-of-membership issues for corporate credit unions, the Credit Union National Association (CUNA) raised several concerns and provided recommendations to the National Credit Union Administration (NCUA) to improve the proposal. For example, the capital plan requirements addressed in the proposed corporate credit union chartering guidance should provide greater flexibility to newly chartered corporates, CUNA Deputy General Counsel Mary Dunn said in the letter. The letter was developed under the guidance of CUNA's Corporate Credit Union Next Steps Working Group chaired by Terry West, President and CEO of VyStar Credit Union. In the comment letter to the NCUA, CUNA added that the Federal Credit Union Act currently allows natural person credit unions to have up to 10 years to become adequately capitalized. “While this timeframe may not be appropriate for a new corporate, we do think reasonable latitude should be afforded new corporate credit unions, as long as they are following a plan to build capital that is approved by the Board,” CUNA said. CUNA also urged the NCUA “to clarify how a new corporate would be able to meet the specific requirement to maintain capital of at least four percent of its moving daily average net assets under the new corporate rule, ‘beginning on the date the Board issues the charter.’” The NCUA should also clarify portions of the proposal that would require organizations submitting corporate credit union charter applications to be comprised of “[s]even or more natural person representatives of natural person credit unions,” CUNA added. According to CUNA,” it is unclear whether each natural person subscriber must represent a different natural person credit union.” The NCUA should also allow some latitude on a case-by-case basis, CUNA added. CUNA proposed that the seven representatives could potentially “represent fewer than seven natural person credit unions such as five, as long as the member support requirements are met.” For the full comment letter, use the resource link.

Maine reps urge interchange caution

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WASHINGTON (11/3/10)--Reps. Mike Michaud and Chellie Pingree, both Democrats representing Maine, urged Federal Reserve (Fed) Chairman Ben Bernanke to “recognize” the protections for credit unions that were built into the Dodd-Frank Act as the Fed works to implement new interchange regulations. The interchange provisions require the Fed to set interchange fees paid by merchants. “While the law is clear that small issuers with $10 billion in assets or below are exempt from the debit interchange transaction regulations, they are not exempt from the impact that regulations on institutions above $10 billion in assets will have on small issuers,” the representatives said in a joint letter to Bernanke. The legislators also encouraged the Fed to ensure that merchants would not be given the ability to refuse transactions from consumers holding cards from specific card issuers. The letter also referenced a Credit Union National Association study which found that up to 67% of credit unions “would lose money on their debit card programs” if the interchange regulations reduced interchange-related revenues by 40%. The legislators said that it is “imperative” that the government’s interchange actions “do not inadvertently hurt the institutions that did not contribute to the financial crisis.”

Inside Washington (11/02/2010)

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* WASHINGTON (11/3/10)--The Financial Stability Board issued a 26-page report containing more than 20 recommendations aimed at strengthening oversight of systematically important financial institutions. The report noted that before the financial crisis some supervisors failed to provide an appropriate balance between risk assessment and capital requirements. The board’s proposed changes seek to make systematically important institutions less vulnerable to potential failure (American Banker Nov. 2). Recommendations include expanding supervisory powers as well as enhancing horizontal reviews and stress tests. Improved macroprudential surveillance was also recommended to identify trends and developments likely to harm institutions’ risk profiles. The Financial Stability Board called on the Basel Committee on Banking Supervision to use peer review to examine stress-testing practices in its 2009 paper and create a stronger tool for identifying future risks …

CUNA seeks comment on mort. appraiser independence

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WASHINGTON (11/3/10)--The Credit Union National Association (CUNA) has asked credit unions to comment on an interim final rule that is intended to ensure that real estate appraisers use independent judgment when preparing property valuations. The rule, which is required under the Dodd-Frank Act, will also seek to ensure that appraisers receive customary and reasonable payments for their services, and will prohibit appraiser coercion. The rule will also prevent appraisers that were hired by lenders from having financial or other interests in the properties or credit transactions, and will prohibit appraisers from materially misrepresenting the value of a consumer’s home. Creditors would also be forbidden from extending credit based on appraisals if the creditor knows beforehand of any violations involving appraiser coercion or conflicts of interest, unless the creditors determine that the property values are not materially misstated. In addition, if creditors are aware of violations by appraisers of applicable laws and rules, they would be required to report these to the appropriate state licensing agencies. This rule will replace the Home Valuation Code of Conduct that was rescinded by the Dodd-Frank Act. In a comment call, CUNA asks a number of questions regarding the interpretation of "customary and reasonable" compensation. CUNA also asked if the Fed should change the rule's safe harbors that differ based on whether the creditor is above or below a $250 million threshold. For the full comment call, use the resource link.