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Inside Washington (11/03/2010)

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* WASHINGTON (11/4/10)--Former Federal Reserve Chairman Paul Volcker has asked the Financial Stability Oversight Council to use clear, concise language in regulations that will implement the “Volcker Rule.” Volcker sent a letter to the council to spell out his concerns about the need to avoid ambiguity. He noted that “firmly worded prohibitions and specificity” will be needed to guide regulators as the law is put into effect. The Volcker Rule places limits on depository institutions’ proprietary trading and forbids the sponsorship of, or investment in, private-equity funds and hedge funds. The Dodd-Frank law provides some exemptions to the rule, such as allowing “market-making” activities (American Banker Nov. 3). Volcker said it is essential to clearly define “market making” because the term could potentially be used to shield “proprietary wagers on the direction of individual securities or markets” … * WASHINGTON (11/4/10)--John Taylor, president and chief executive of the National Community Reinvestment Coalition, called on the federal government to intensify efforts to avert foreclosures (American Banker Nov. 3). Taylor noted in a press release that the government has power over Fannie Mae, Freddie Mac and the Federal Housing Administration, which provides the leverage necessary to decrease foreclosure activity. As a step toward reducing foreclosures, Taylor suggested the Federal Reserve Board should create incentives for banks to trim back the principal balance on loans held in mortgage-backed securities, which currently total $1.1 trillion. … * WASHINGTON (11/4/10)--Timothy Ward has been named Deputy Comptroller for Thrift Supervision, the office of the Comptroller of the Currency announced Wednesday. Ward, who joined the OCC in February, spent more than 26 years at the Office of Thrift Supervision, included a stint from 2007 to 2009 when he was Deputy Director for Examinations, Supervision, and Consumer Protection. Ward will lead the planning process for the OCC’s integration of the OTS examination and supervision functions and staff. Following the July 2011 transfer date, Ward’s position will continue under a Dodd-Frank Wall Street Reform and Consumer Protection Act requirement to establish a Deputy Comptroller position dedicated to thrift supervision… * WASHINGTON (11/4/10)--Mitchell Glassman, the Federal Deposit Insurance Corp. (FDIC) official who supervises bank takeovers, plans to retire on Dec. 3, according to an FDIC announcement. Glassman, who is the director of the division of resolutions and receiverships, supervised the FDIC’s seizure of 379 depository institutions in 2009 and 2010 (American Banker Nov. 3). During the financial crisis, the division’s workforce increased from 220 employees to more than 2,000. Glassman has served the FDIC for 35 years since joining its office in Kansas City, Mo. The FDIC has named James Wigand, the division’s deputy director, to serve as acting director …

NCUA offers merger registry guidance

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ALEXANDRIA, Va. (11/4/10)—As promised at its October open board meeting, the National Credit Union Administration (NCUA) has sent a Letter to Credit Union (No. 10-CU-22) describing the new national merger-partner register and what it hopes to achieve. “ If your credit union is interested in expanding your field of membership by merging with another credit union, you can now let your regulators know by signing up for NCUA’s new Merger Partner Registry,” says the letter signed by Chairman Debbie Matz. The communication describes the process of how to sign on to the registry and carries a boldface warning that signing up does not guarantee that a credit union will be selected as a merger partner. The NCUA says it has two goals the registry:
* To establish a wider pool of interested credit unions to consider assisted merger and P&A opportunities; and, * To improve transparency by shedding more light on NCUA’s process of selecting partners.
The letter instructs credit unions to contact their regional NCUA office with any questions about the registry. At the Oct. 21 meeting, agency staff gave a presentation regarding NCUA's recently launched Merger Partner Registry, part of the NCUA's Credit Union Online system, which credit unions already use to submit 5300 Call Reports. Use the resource link to access the NCUA letter.

CUNA CUs help bring strong election results

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WASHINGTON (11/4/10)--Credit Union National Association (CUNA) President/CEO Bill Cheney noted that despite the “losses of Democratic friends,” credit unions had a strong 2010 midterm election, with 26 Senate candidates and 302 House candidates backed by the Credit Union Legislative Action Council (CULAC) winning their respective contests. Overall, as of Wednesday morning, 93% of candidates in called races who received CULAC support had won election, Cheney reported. He added that the successes can be attributed to "the strong, favorable image of credit unions, both among our own members and the voting public at large." "The election results, particularly in the races where we communicated directly with credit union members, bear that out and offer a road map not only for future efforts at the ballot box but for grassroots campaigns on credit union legislation as well,” Cheney said. A race involving Sen. Patty Murray (D-Wash.) remained too close to call at press time, and House races involving 8 additional CULAC-backed candidates remained undecided as well. CUNA, CULAC, state credit union leagues and individual credit unions spent a combined $3.9 million on various candidates, and $1.1 million on direct communications with voters in 13 general and primary races, targeting 12 states. CUNA’s targeted independent expenditures (IE) helped Sen. Majority Leader Harry Reid (D-Nev.) maintain his seat. Current Rep. Roy Blunt (R-Mo.) also won his Senate contest. In the House, CUNA-backed freshman Rep. Kurt Schrader (D-Ore.) and Rep. Cory Gardner (R-Colo.) also won. CUNA, the leagues and credit unions also backed winning House candidates Ed Perlmutter (D-Colo.), Larry Kissell (D-N.C.), Kevin Yoder (R-Kansas) and Steve Stivers (R-Ohio) via partisan mailing campaigns. While the loss of longtime credit union champion Rep. Paul Kanjorski (D-Penn.) is “a difficult loss for credit unions,” that loss “also demonstrates why CUNA has worked so hard to develop new up-and-coming champions on both sides of the aisle,” Cheney said. Over one million pieces of direct mail were sent to voters on behalf of various candidates, and CUNA finished this election cycle as the most bipartisan spender among the top 50 group that made independent expenditures during the election.

How did CUs fare CUNA election analysis

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WASHINGTON (UPDATED: 1:00 P.M. ET 11/3/10)--With the makeup of the 112th Congress falling into place after Tuesday's midterm elections, the Credit Union National Association (CUNA) CUNA has analyzed the near future for credit unions and legislation in general. The divide between a Republican House and a Democratic Senate could prove to be a challenge for new legislation, but smaller items such as the potential enactment of capital reform for credit unions, could see debate, CUNA Senior Vice President of Legislative Affairs John Magill said. Magill also noted that the tone of the House should shift away from the consumer protection dynamic seen in the past two years, a move that makes further discussions of the Community Reinvestment Act, mortgage cramdown provisions, and overdraft protection legislation less likely. Magill added that legislation that would increase the cap on member business lending done by credit unions could fit in to the House agenda if Republicans follow up on campaign promises of reducing government spending and helping small businesses create jobs. The fight for MBL legislation will continue in the upcoming lame duck session, which should begin next week, and will likely continue into the next session of Congress when it starts in January, Magill said. Congress will likely start its January work by considering tax reform and ways to tackle the federal budget deficit, and Republicans may use their newfound control of the House of Representatives to force symbolic votes to repeal the Health Care Reform law or parts of the financial reform bill. However, with President Obama wielding a veto pen, there may not be a true resolution to these votes. The committee agenda in both branches of Congress should remain the same, at first, with Housing finance reform remaining a top priority for both the House Financial Services Committee and the Senate Banking Committee. A key point in the coming debate will be the role of the federal government in the secondary mortgage market, a question with huge implications for credit unions. The recently enacted Dodd-Frank Act should also come up for discussion, as will the still developing Consumer Financial Protection Bureau, Magill said, adding that Republican-controlled House committees could seek to address the regulatory reforms in this manner, effectively working to change the enforcement of the new regulations from within instead of repealing them outright. CUNA expects the following representatives to assume control of key House committees:
* House Financial Services Committee Chairman: Spencer Bachus (R-Ala.); * House Ways and Means Committee Chairman: Dave Camp (R-Mich.); * House Appropriations Chairman: Jerry Lewis (R-Calif.); * House Judiciary Committee Chairman: Lamar Smith (R-Texas); * House Rules Committee Chairman: David Dreier (R-Calif.); * House Small Business Committee Chairman: Sam Graves (R-Mo.); and * House Oversight Chairman: Darryl Issa (R-Calif.)
Overall, with the 2012 campaign season likely to begin soon, an ambitious legislative agenda is not expected in the near future. CUNA was very active in the election process and overall, as of this morning, 93% of candidates in called races who received CULAC support won election.