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Senate joins House with MBL cap-lift bill

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WASHINGTON (12/22/09)--A bill to increase credit union member business lending (MBL) to 25% of assets was introduced Monday in the Senate by Sens. Mark Udall (D-Colo.), Charles Schumer (D-N.Y.), Barbara Boxer (D-Calif.), Joseph Lieberman (I-Conn.), Olympia Snowe (R-Maine), Susan Collins (R-Maine) and Kirsten Gillebrand (D-N.Y.). The Credit Union National Association (CUNA) strongly supports the measure, S 2919. CUNA President/CEO Dan Mica offered credit unions’ “sincere thanks” to the senators, saying the lawmakers’ action acknowledges “that credit unions can be a significant part of the solution for helping the economy." Similar bipartisan legislation, also backed by CUNA, was introduced in the House last July by Rep. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.). While the MBL issue will carry into 2010, Mica still emphasized that, "Time is of the essence; with this action, House leaders should recognize that increased capacity for credit union business lending has legs--despite cynical banker opposition. The House should now begin moving its bill through the legislative process as soon as possible." The House bill, known as Promoting Lending to America’s Small Businesses Act (H.R. 3380), would also raise the “de minimis” threshold for a loan to be considered a member business loan to $250,000, and exempt loans made to non-profit religious organizations as well as loans made in qualified underserved areas from the cap. The Senate bill features the former provision, but not the latter. The bill was introduced in the Senate the same month as President Barack Obama met with bankers to urge them to loosen unnecessary restrictions on credit to help the economy recover. CUNA has long advocated lifting the member business lending cap for credit unions, but even more vehemently so as lending from banks and other sources has shrunk during the country’s economic downturn. CUNA estimates that the higher business lending authority could provide $10 billion in new small business loans and at least 108,000 new jobs. A joint U.S. Treasury-Small Business Administration report, submitted following President Obama's recent White House jobs summit, included increased credit union business lending as part of a long list of possible job-stimulus initiatives that came out of that meeting. CUNA’s Mica has noted that the only lobbyists opposed to increased MBL powers are those representing the banking industry. "These are the same players who accepted billions of dollars of taxpayer money and now are restricting access to credit for consumers and small businesses.” Among those who have voiced public support for lifting the cap are the National Association of Realtors; National Cooperative Business Association; Americans for Tax Reform, Competitive Enterprise Institute, Ford Motor Minority Dealer Association, League of United Latin American Citizens, Manufactured Housing Institute, National Association for the Self Employed, National Association of Mortgage Brokers, National Cooperative Grocers Association, National Farmers Union, National Small Business Association, NCB Capital Impact, the National Association of Professional Insurance Agents, National Association of Manufacturers, National Council of Textile Organizations, and Council of Insurance Agents and Brokers.

Texas foundation applauds presidents fin lit commitment

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FARMERS' BRANCH, Texas (12/22/09)--The Texas Credit Union Foundation (TCUF) lauded the Obama administration for its plans to implement a nationwide financial education program for students. Credit unions throughout the nation have long been championing financial literacy. TCUF helped bring the National Endowment for Financial Education (NEFE)'s accredited High School Financial Planning Program (HSFPP) to schools in Texas, TCUF said (LoneStar Leaguer Dec. 21). TCUF has taken the program a step further and developed Project NEFE as a training program in the community. The Treasury Department and the Department of Education teamed up to offer the National Financial Capability Challenge, a nationwide initiative aimed at providing students, especially in economically disadvantaged communities, a chance to build their financial understanding "No matter your background, the need for an understanding of basic financial principles and operations is fundamental, and we at the foundation are adamant in our support of President Obama's decision," said Courtney Nickles, executive director at TCUF. TCUF also worked with state legislators to support a state law in 2005 to require financial literacy education as a prerequisite to high school graduation. A number of state league associations have made similar efforts to get financial literacy education mandated in their state's educational curriculum.

Inside Washington (12/21/2009)

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* WASHINGTON (12/22/09)--Financial industry observers said that the Federal Deposit Insurance Corp. (FDIC) should help financial institutions that are in trouble instead of letting them fail. The problem is that buyers are scared away from purchasing open and operating institutions when the FDIC sells failed banks’ deposits cheaply and guarantees their losses, observers noted (America Banker Dec. 22). If the FDIC provided open-bank assistance in a few cases, the failures could slow and the government could save money. It could be the “least-cost” solution in some cases, said Ron Glancz, partner at Venable LLP. Lawmakers need to help the FDIC prop up institutions, because they cannot do open-bank assistance under the current law. Banking agencies can encourage more private capital investment in banks, he added. Tom Vartanian, former Federal Home Loan Bank Board senior official, said the FDIC should use its systemic risk exception to help small institutions. If 500 community banks fail, there’s an impact in 500 communities and in the FDIC, he added. The FDIC has said it is not going to help openly troubled institutions. The FDIC can’t assist an “open institutions absent a systemic risk determination,” FDIC Chair Sheila Bair said earlier this month ... * WASHINGTON (12/22/09)--Treasury inflation protected securities (TIPS) indicate that Federal Reserve Board Chairman Ben Bernanke won the battle with deflation, Bloomberg News reported Monday. The gap between yields on Treasuries and TIPS due in 10 years--which measures the outlook for consumer prices--closed about 2.25 percentage points four days last week--the longest stretch since August 2008. Bernanke has said that tame inflation expectations have kept the target interest rates for overnight loans between banks at 0% to 0.25%. But, TIPS indicate that there may be more losses in bonds. Yields on the 10-year Treasury note hit 3.62% last week ... * WASHINGTON (12/22/09)--The Federal Bureau of Investigation released a preliminary semiannual uniform crime report, indicated that violent crime in the nation decreased by 4.4% and the volume of property crime declined 6.1%. The report is based on information from law enforcement agencies ...

U. N. resolution 2012 is International Year of Co-ops

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NEW YORK (12/22/09)--The United Nations (U.N.) has passed a resolution declaring 2012 as the International Year of Cooperatives--the first time the international body has made such a declaration. The National Cooperative Business Association (NCBA) obtained a draft version of the resolution. The final version, which will not be available online for a few days, had no changes, NCBA said. The organization will post the final resolution on its website. "Co-ops help people of all means, from all walks of life, work together for a common good," said NCBA President/CEO Paul Hazen (USAgNet Dec. 21). "That's why they're not only so attractive in the U.S., but in countries around the world." The resolution was supported by the World Council of Credit Unions (WOCCU). In May, WOCCU CEO Pete Crear spoke at a U.N. meeting of global experts on "Cooperatives in a World in Crisis" (News Now May 6,). At that time, WOCCU said it supported the proposed International Year of Cooperatives for 2012. "Declaring 2012 as the International Year of Cooperatives would shine a more intense light on cooperatives and credit unions worldwide," Crear said in May.