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Inside Washington (11/24/2008)

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* WASHINGTON (11/25/08)--President-elect Barack Obama’s pick for the next Treasury secretary, Timothy Geithner, has won support from industry observers. After rumors of Geithner’s appointment Friday, the Dow Jones industrial average increased more than 500 points. Geithner joined the Treasury in 1988 and served as undersecretary for international affairs from 1999 to 2001 (American Banker Nov. 24). He also directed policy development and the review department at the International Monetary Fund from 2001 to 2003. During a Senate Banking Committee hearing in April, Geithner also was perceived by senators as being more straightforward in replying to questions from lawmakers than Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke ... * WASHINGTON (11/25/08)--The Office of the Comptroller of the Currency (OCC) announced Friday that it granted its first conditional preliminary approval of a new type of national bank, a “self-charter,” designed to facilitate new equity investments in troubled depository institutions. When OCC grants preliminary approval to investors for a national bank charter, the charter remains inactive until the investor group is in a position to acquire a troubled institution. By granting the preliminary approval, the OCC expands the pool of potential buyers available to buy troubled institutions. The first such approval was granted Nov. 17 to establish Ford Group Bank ... * WASHINGTON (11/25/08)--The Federal Deposit Insurance Corp. (FDIC) Friday approved a final rule regarding the agency’s Temporary Liquidity Guarantee Program (TLGP), with a few changes. Originally, the FDIC planned to charge eligible entities 75 basis points annualized for guaranteed debt. After reviewing comments, the FDIC will charge based on a sliding scale. Shorter-term debt will have a lower fee structure and longer-term debt will have a higher fee. The range will be from 50 basis points on debt of 180 days or lesd to a maximum of 100 basis points for debt with maturities of one year or longer annualized ... * WASHINGTON (11/25/08)--The Treasury announced Monday an extension of its temporary guarantee program for money market funds until April 30, 2009, to support ongoing stability in the market. All money market funds that participate in the program and meet the extension requirements are eligible to continue to participate. The program will cover shareholders up to the amounts they held in participating money market funds as of the close of business Sept. 19 ...

NCUA has OKd Mass. bank-CU merger

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WASHINGTON (11/25/08)--Northeast Community CU, Haverhill, Mass., got the okay Nov. 17 from the National Credit Union Administration (NCUA) regarding that credit union’s proposed merger with Haverhill Bank. An NCUA spokesman confirmed Monday that the credit union had met all NCUA merger requirements--including certification of the membership vote—and was notified it could go ahead with its plan. With the merger approved, the resulting bank is expected to have combined assets of roughly $260 million, deposits totaling $220 million and capital totaling $30 million. It would have the second-largest market share in Haverhill, according to reports early in the year. Haverhill Bank and Northeast Community announced their plan to combine in August 2007. However, the NCUA in April deferred a decision on the merger until a membership vote could be taken which met the requirements of the agency's rules for converting a credit union to a mutual savings bank. The agency action, in effect, negated a 77-1 membership vote cast in September 2007 in which Northeast Community members approved the move. Sixty-seven depositors at Haverhill Bank had voted unanimously the week before to approve the bank's proposed merger. The Massachusetts Division of Banks has also given its requisite approval, according to a Haverhill Bank press release. The merger will be completed in December.

Print TV radio outlets cover CUNA holiday poll

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WASHINGTON (11/25/09)—More than 20 media outlets turned out to cover the ninth annual projection of consumers’ holiday spending plans produced by a national survey sponsored by the Credit Union National Association (CUNA) and Consumer Federation of America (CFA). The event was held Monday at The National Press Club in Washington, D.C.
Click to view larger image CUNA's Bill Hampel discusses on-camera the results of the consumer holiday spending survey with a reporter from Cox TV following the press conference today at National Press Club.
The survey of more than 1,000 adult Americans showed that a whopping 55% intended to decrease their holiday spending this year. (See related story in today’s News Now: Survey: Consumer desire to cut holiday spending soars.) CUNA's Mark Wolff, senior vice president of communications, said the annual event with CFA--particularly with its no-nonsense advice to help consumers control their holiday debt--has become another way to show credit unions are a trustworthy resource for the nation's consumers. Among the television, cable and radio networks, and newspaper groups that attended or covered the press conference:
* NBC News * CNN and CNN Newsource * Bloomberg * FOX News * ABC Radio News * Hearst TV * HD News * Cox TV * CBC News (Canadian Broadcasting Corp.) * AP TV (Associated Press)
Use the link below to read more stories of credit unions in the media.

CUNACFA Desires to cut holiday spending soar

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WASHINGTON (11/25/08)—The number of consumers saying they are determined to spend less this year on holiday gifts soared, according to the results of the ninth annual survey commissioned by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA). “Each year from 2003 to 2007, between 30% and 35% of consumers.
Click to view larger image CUNA Chief Economist Bill Hampel explains the results of the CFA/CUNA survey on consumer holiday spending during the press conference today (Monday)at the National Press Club unveiling the survey and results. Representatives from national and regional news organizations attended the event, including NBC News, AP TV, Fox, CNN, Bloomberg, and ABC radio.
reported that they were planning to cut back their holiday spending,” said CUNA Chief Economist Bill Hampel Monday at a press conference held to discuss the survey findings. This year, he noted, that figured soared. Fifty-five percent of respondents, interviewed by phone between Nov. 6-9, said they were planning to reduce spending “somewhat,” with 27% indicating that they want to spend “much less than last year.” “As a result,” Hampel said, “we may see an actual decline in holiday spending for the first time in many years.” Not surprisingly, the shaky state of the economy and peoples’ concerns about their financial futures were cited as the foremost factor determining consumers’ desire to cut back on holiday spending—36% of those who intend to reduce spending said that was their main reason. “The financial crisis and sustained economic downturn the nation has been experiencing are taking their toll on consumers,” Hampel explained. “People are worried about their finances, job loss, and what the future will hold. Amid their uncertainty, they are reacting by reining in their spending plans.” Hampel said a primary factor fueling financial anxiety is concern about meeting monthly debt obligations. CFA Executive Director Stephen Brobeck noted that a record 48% said this was a concern, with 23% indicating they were “very concerned.” A year ago, only 40% said they were concerned, and that was amid rocketing gasoline and energy costs. Also named as factors contributing to lower spending plans this year: 22% said they had less money; 12.5% cited a desire to save or reduce debt; 10.5% pinned it on higher prices; and 9% said they have less income. The CFA/CUNA report is based on the recent survey of more than 1,000 representative adult Americans by Opinion Research Corporation. The CFA and CUNA suggest the following holiday spending tips to help consumers avoid falling into a seasonal debt trap:
* Make a budget and list what you will buy and how much you can afford to spend and then stay within that budget: * Comparison shop: You can easily save more than 10% on most items by comparing prices at different stores. Often the savings are even greater; * Pay off your holiday debts quickly and remember you are less likely to overdo if you pay with cash or check than if you use either credit or debit cards; * Start saving now for 2009—open a Christmas Club account: While these accounts do not pay much if any interest, they provide a practical way to save small amounts over time; * Be smart about gift cards: read the fine print on each card. If you don’t use the card quickly, it can lose value. There may be a fee for checking your balance as well as a monthly inactivity, maintenance, administrative, or service fee; * Pay attention to return policies. Some stores are tightening return policies. Also keep receipts and note time limits, restocking fees, and other factors that may affect your recipient; * And also, find low- or no-cost ways to enjoy the holiday season. Just a few changes to holiday habits can really ease the strain on a spending budget. Draw names to reduce the number of people for whom you buy gifts; give homemade items; make your own gift wrap; organize a potluck dinner rather than preparing and paying for the entire holiday meal.
CFA’s Brobeck advised, “With just a little planning, consumers can substantially reduce their holiday spending without sacrificing holiday quality.”

Mica New economic team needs to understand CUs

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WASHINGTON (11/25/08)—President-elect Barack Obama has put together an economic team for his incoming administration that is both highly experienced and well regarded, said Credit Union National Association President/CEO Dan Mica Monday. Obama, who will be sworn in Jan. 20 as the 44th President of the United States, announced the names of five of his intended economic advisers, including Timothy Geithner as Secretary of the Treasury. Geithner currently serves as president/CEO of the Federal Reserve Bank of New York, where he has played a key role in formulating the nation's monetary policy. Upon hearing the Obama transition announcement, CUNA’s Mica said the challenge to the credit union movement now is to ensure that team has a clear understanding of the role of credit unions in serving 91 million Americans. The CUNA leader said credit unions also must work to clearly define for the new administration the unique nature of credit unions as cooperative, not-for-profit financial institutions. He added that this goal includes “the vital issue of maintaining an independent regulator and insurance fund for credit unions.” “Developing this understanding is no unusual task for CUNA and credit unions – it is something we have done with nearly every new administration. Yet, we are consistently successful in developing a solid working relationship with each administration and impressing upon each with the need to support credit unions whenever they are considering action related to the financial system. “We fully expect to be successful again and look forward to working with this new team,” Mica pronounced. The Obama transition team announced the following:
* Geithner as Treasury Secretary. Before joining the Federal Reserve System, Geithner joined Treasury in 1988 and has served three presidents. From 1999 to 2001, he was Under Secretary of the Treasury for International Affairs. Then he served as director of the Policy Development and Review Department at the International Monetary Fund until 2003. * Lawrence Summers to be nominated as Director of the National Economic Council. Summers is currently the Charles W. Eliot University Professor at Harvard University and served as 71st Secretary of the Treasury from 1999 to 2001. He has also been the World Bank's top economist. * Christina Romer to be nominated Director of the Council of Economic Advisors. Romer is the Class of 1957 Professor of Economics at the University of California, Berkeley, where she has taught and researched since 1988. Prior to joining the Berkeley faculty, Romer was an assistant professor of economics and public affairs at Princeton University's Woodrow Wilson School of Public and International Affairs. She is co-director of the Program in Monetary Economics at the National Bureau of Economic Research and has been a visiting scholar at the Board of Governors of the Federal Reserve System. * Melody Barnes to be nominated Director of the Domestic Policy Council. Barnes is co-director of the Agency Review Working Group for the Obama-Biden Transition Team, and served as the Senior Domestic Policy Advisor to Obama for America. Barnes previously served as Executive Vice President for Policy at the Center for American Progress and as chief counsel to Senator Edward M. Kennedy on the Senate Judiciary Committee from December 1995 until March 2003. * Heather Higginbottom to be nominated as Deputy Director of the Domestic Policy Council. Higginbottom served as Policy Director for Obama for America, overseeing all aspects of policy development. From 1999 to 2007, Higginbottom served as Senator John Kerry's Legislative Director. She also served as the Deputy National Policy Director for the Kerry-Edwards Presidential Campaign for the primary and general elections. After the 2004 election, Higginbottom founded and served as Executive Director of the American Security Project, a national security think tank. She started her career as an advocate at the national non-profit organization Communities in Schools.
Once instated as the country’s chief executive, Obama must formally nominate his candidates for the positions he has designated. They, in turn, must go through a thorough vetting process by the U.S. Congress, which will either confirm or deny them the positions.