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Washington Archive

Washington

CUNA comments on CARD Act gift card rules

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WASHINGTON (12/23/09)--The Credit Union National Association (CUNA) in a recent comment letter told the Federal Reserve Board that some exceptions to proposed rules that will implement the restrictions on fees and expirations dates for gift cards and similar products, as required under the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act), should apply in some instances. Specifically, CUNA stated that an exception that applies to reloadable cards that are not marketed as gifts “should apply if the issuer does not market the card in this manner, regardless of how the card may be characterized by others.” As for the requirement to provide an expiration date that is at least five years after issuance, the Board provides two alternatives for compliance and CUNA supports the alternative that would require policies and procedures to ensure consumers have an opportunity to purchase a card with an expiration date that is at least five years after purchase. CUNA also encouraged the Fed to alleviate some of the confusion caused by a misunderstanding of expiration date rules by informing consumers that the expiration date that is printed on their gift card may not “coincide with the expiration date of the underlying funds.” While CUNA generally supports disclosure information that helps consumers understand financial products, there is some concern that it will be difficult to place all of the needed disclosures in the spaces provided on the gift card. CUNA recommended that the Fed “provide some flexibility in the placement and location of these disclosures” to help alleviate these disclosure issues. CUNA also suggested that satisfying a requirement that would force credit unions to automatically issue replacement cards if the underlying funds do not expire until after the expiration date would be “impossible,” as “credit unions do not have records as to who is the ultimate recipient of these cards.” Also, while gift cards or other certificates that are printed on paper should not be exempted from these rules, CUNA called on the Fed to exempt cards that are sold and in circulation as of Aug. 22, 2010 from the rules. Use the resource link below to read CUNA's complete remarks.

Inside Washington (12/22/2009)

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* WASHINGTON (12/23/09)--The Treasury Department has adjusted pay limits at American International Group Inc. (AIG), prompted by a highly paid AIG employee who won’t leave the company by year-end as originally expected (American Banker Dec. 22). Kenneth Feinberg, Treasury pay czar, said AIG can pay the employee $4.3 million in incentive payments, on top of his $450,000 salary. In other news, Treasury modified a pay rule to allow Citigroup to pay expatriate compensation to five employees instead of four ... * WASHINGTON (12/23/09)--Howard Schmidt, former eBay Inc. and Microsoft Corp. security official, has been tapped to be the White House cyber security chief. Schmidt will set computer security policy and provide budget guidance throughout the federal government (The Wall Street Journal Dec. 22). He also will tap cyberdefense capabilities at the National Security Agency. Schmidt has previously worked for the White House, the Air Force and Federal Bureau of Investigation. He is president of the Information Security Forum, a nonprofit security group ... * WASHINGTON (12/23/09)--The Federal Reserve Board Tuesday announced that the asset-size exemption threshold for depository institutions under Regulation C, which implements the Home Mortgage Disclosure Act (HMDA), will remain $39 million. As a result, institutions with assets of $39 million or less as of Dec. 31 are exempt from collecting data in 2010. Under HMDA, mortgage lenders in metropolitan areas are required to collect, report and disclose data about applications for, and originations and purchases of home purchase loans, home improvement loans and refinancings ...

CU CEO discusses small biz lending at Obama meeting

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WASHINGTON (12/23/09)--Hope Community CU CEO Bill Bynum was the only credit union official among several finance industry representatives that discussed various approaches to boosting small business lending during a Dec. 22 meeting with President Barack Obama and key members of his economic team. During the meeting, Bynum detailed his own experiences as CEO of the $68.7 million asset, Jackson, Miss.-based credit union, which serves members in four Mississippi Delta states, and discussed some of the lending issues that are unique to the communities that his credit union serves. Bynum was also invited to the White House in his capacity as the chairman of the CDFI Advisory Fund. After the meeting, Bynum told News Now that one goal of the meeting with Obama was to ensure that institutions such as his credit union, which is one of the few credit unions to participate in the Treasury’s Community Development Financial Institutions (CDFI) program, would have the “tools” needed to continue lending activities. Bynum is the chairman of the CDFI Advisory Council. His credit union is a member of the Mississippi Credit Union Association and the Credit Union National Association (CUNA). “We know how to lend in times like these, and we want access to the same types of resources and latitude that big banks have so we can do our job,” Bynum added. "I think the president heard that message very clearly." Obama acknowledged that credit unions and small banks did not create the current financial crisis, and added that they can contribute to the recovery by lending to small businesses and families in need of funds. Bynum was also scheduled to appear yesterday on the Fox Business Network, the PBS Nightly Business Report, and will appear today on NPR's "Tell Me More" as part of their coverage of the White House meeting. CUNA has recognized the need for increased lending to small businesses, and has strongly supported House and Senate legislation that would increase credit union member business lending to 25% of assets. The Senate bill, S. 2919--introduced in the Senate on Monday 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.)--could be taken up by the Senate once that legislative body returns in early 2010. Similar House legislation, H.R. 3380, has been introduced by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.).

Fast-paced financial reform increases CUNA efforts

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WASHINGTON (12/23/09)--The expansive legislative agenda, which was led in 2009 by the administration of President Barack Obama and congressional leaders, has led to sweeping regulatory changes and, for many lobbying groups, including the Credit Union National Association (CUNA), increased levels of activity. CUNA Senior Vice President of Legislative Affairs John Magill told Politico (Dec. 22) that the “frantic pace” of this years’ legislative calendar, which included in-depth reforms of financial regulations, credit card rules, bank overdraft rules, and other items, has caused CUNA to spend “considerably more” on its lobbying efforts than it spent in the previous year. However, Magill said, simple accounting does not explain CUNA’s full grassroots efforts, which resulted in thousands of credit union representatives coming to Washington for CUNA’s annual Government Affairs Conference and hundreds more speaking directly with their members of Congress during CUNA’s “Hike the Hill” initiatives. This type of grassroots activity, which also took place earlier this month in advance of the recent final House vote on financial reforms, contributed to the defeat of a proposed mortgage cramdown amendment, Magill added. Citing data from the Center for Responsive Politics, Politico reported that in spite of a decrease in the number of registered lobbyists and a still troubled economy, D.C.-based lobbying groups will likely outdo the previous spending record of $3.3 billion, which was set last year.

CUNA thanks Udall for S. 2919 sponsorship

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WASHINGTON (12/23/09)--The Credit Union National Association (CUNA) in a Tuesday letter thanked Sen. Mark Udall (D-Colo.) for introducing S. 2919, the Small Business Lending Enhancement Act, earlier this week. The legislation, which was co-signed by Sens. 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.), would increase credit union member business lending (MBL) to 25% of assets and raise the "de minimis" threshold for a loan to be considered a member business loan to $250,000. While S. 2919 “will not completely solve the problems small businesses face,” CUNA in the letter recommended that S. 2919 could be considered as part of broader job creation legislation. The changes proposed by S. 2919 “will give credit unions currently serving the lending needs of their business-owning members the opportunity to help even more” and will “encourage credit unions that do not currently offer these loans to consider investing the necessary resources to do so,” the letter added. In a release addressing the recently introduced legislation, Udall said that “by increasing access to credit union loans, small businesses across the country will be able to expand, and create thousands of jobs." Snowe seconded Udall’s remarks, saying that “modestly increasing the lending cap for credit union members to 25 percent” would “help to thaw the frozen credit markets and increase access to critical capital for small businesses which, in turn, will bolster their business and spur job growth across the nation.” Boxer also hailed the legislation as a “common-sense measure” that will spur business growth. The release also quoted CUNA estimates that state that the MBL reforms would create over 100,000 new jobs and increase small business lending by $10 billion within the first year following their enactment.