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Inside Washington (02/17/2010)

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* WASHINGTON (2/18/10)--A small financial institution has won a case against the Federal Deposit Insurance Corp. (FDIC) regarding an enforcement order the bank challenged (American Banker Feb. 17). FDIC had attempted a preemptive order against Advanta Bank in December, preventing Advanta from dealing with its bankrupt parent, Advanta Corp. The FDIC said it had special authority to preclude Advanta from challenging the order. However, U.S. District Court in Washington, D.C., Judge John Facciola sided with Advanta, saying that the FDIC misused its authority. The bank’s dealings with its bankrupt parent did not lead to the bank’s dissolution, Facciola said. The agency is reviewing the decision, said an FDIC spokesperson. The decision serves as a “wake up call” to regulators to stay within their authority when they exercise powers over financial institutions to address the financial crisis, said Advanta’s attorney, Andrew Sandler. In November, Advanta Corp. filed for bankruptcy ... * WASHINGTON (2/18/10)--Eleven lenders who received bailout money originated $178.1 billion of new loans in December, up 13% from November, according to a Treasury survey report. The gains were in home mortgages, credit cards, home equity lines of credit and other loans (American Banker Feb. 18). Total average loan balances rose 13% from December 2008, and total loan originations rose by 17%. Outstanding mortgage balances were up 29% compared with balances in December 2008, and total mortgage originations increased 81%, the survey report added ... * WASHINGTON (2/18/10)--The bulk of stimulus spending is yet to come, according to The Wall Street Journal (Feb. 18). The stimulus program turns a year old this week, and about $180 billion allocated for water projects and new rail lines will be spent this year at the earliest, the newspaper said. The infrastructure spending is scheduled to hit in the second year of the program, which means more private-sector employees will receive money. Economists say the change will not affect the unemployment rate, but the shift could be politically significant because Republicans have been critical of the lack of private business hiring as a result of the stimulus, the newspaper added. The Obama administration has said the stimulus money has helped support two million jobs. Most stimulus spending, so far, has benefited public employees, including school teachers and staff ... * WASHINGTON (2/18/10)--The Federal Housing Finance Agency (FHFA) has proposed a rule for new housing goals for Fannie Mae and Freddie Mac. The goals define the target levels of loans from different income-level groups. For this year and 2011, FHFA is proposing three single-family home-purchase goals: low-income families, very-low income families, and families in low-income/high minority/disaster areas. The rule also sets goals for single-family refinance mortgages for low-income families. Separately, the FHFA has proposed multi-family housing goals for low-income families and for very low-income families ... * WASHINGTON (2/18/10)--A U.S. District Court of Appeals has affirmed a decision by the Merit Systems Protection Board, which had affirmed a decision by the National Credit Union Administration (NCUA) to remove one of its former examiners, Margaret Considine, for poor performance. Considine had appealed the board’s decision to the court. The board said that it would not overturn any agency decision “supported by relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Considine worked for NCUA as an examiner at the Region 1 office in Albany, N.Y. She contends that NCUA removed her for reprisal in whistleblowing activities, and because she had filed grievances against her supervisors from 1998 to 2008. On March 18, 2008, Considine was given a notice of unacceptable performance and was placed on a 120-day performance improvement plan. On Sept. 20, 2008, she was notified by the associate regional director that her performance had not improved and recommended that she be removed. She appealed to the Merit Systems Protection Board on Dec. 29, 2008 ...

Fed Chair Bernanke to report on economic monetary policy

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WASHINGTON (2/18/10)--Federal Reserve Chairman Ben Bernanke on Feb. 24 will deliver the semiannual report on the state of the economy and monetary policy before the House Financial Services Committee. The Humphrey Hawkins hearing, which is held on a bi-annual basis, was announced by Committee Chair Rep. Barney Frank (D-Mass.) on Wednesday. Bernanke earlier this month was sworn in for a second four-year term as Fed chairman. His term as chairman ends Jan. 31, 2014, and his 14-year term as member of the board ends Jan. 31, 2020.

OMB approves new self-cert form for private education loans

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WASHINGTON (2/18/10)--The Office of Management and Budget (OMB) this week presented a new Private Education Loan Applicant Self-Certification form which, according to OMB, may be used by both educational institutions and private educational loan lenders, including credit unions. The Higher Education Opportunity Act of 2008 amended the Truth in Lending Act and the Federal Reserve’s Regulation Z to require private education lenders to obtain completed and signed self-certification forms from the applicant before that lender may complete a private education loan for the student that is receiving the loan. A portion of the form will require applicants to include the "cost of attendance for the period of enrollment covered by the loan, any estimated financial assistance for the period of enrollment covered by the loan, and the difference between the cost of attendance and the estimated financial assistance," according to the OMB. Applicants may obtain the new form from either the educational institution or the private educational lender. Educational institutions must provide the applicant with any necessary information required to properly complete the form, effective immediately. However, colleges will not be required to track the status of private education loans once they have provided the self-certification form to either the lender or the loan applicant. The form may be provided either in person, as a paper copy, or as an online .pdf file, and can be obtained through either an on-campus financial aid office or the applicant’s credit union or other financial service provider.

SBAs Mills to take part in CUNA lending conference call

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WASHINGTON (2/18/10)--The Credit Union National Association (CUNA) will provide credit unions with up to date information on how to make Small Business Administration (SBA) loans or expand their current SBA lending program during a March 25 audio conference call. The call, which will feature the insight of National Credit Union Administration Chairman Debbie Matz and SBA Administrator Karen Mills, will give credit unions the opportunity to discuss working within the SBA loans programs directly with these high-ranking staff members. CUNA President/CEO Dan Mica and Senior Vice President/Deputy General Counsel Mary Dunn will also lead discussion and participate in the call. To register for the audio conference call, which will take place at 2 p.m. ET, use the resource link.

Rep. Sherman of California added to GAC lineup

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WASHINGTON (2/18/10)--Rep. Brad Sherman (D-Calif.) will join fellow lawmakers House Majority Whip Rep. James Clyburn (D-S.C.), House Financial Services Committee Chairman Barney Frank (D-Mass.), House Minority Whip Rep. Eric Cantor (R-Va.), and Rep. Spencer Bachus (R-Ala.), among others, as a speaker at the Credit Union National Association’s Government Affairs Conference (GAC), which begins this Sunday in Washington, D.C. National Credit Union Administration Chairman Debbie Matz, U.S Small Business Administrator Karen Mills, and Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) are also among those scheduled to speak at the GAC. Sherman, who is a senior member of the House Financial Services Committee, has repeatedly called for Congress to lift the credit union member business lending cap, which currently stands at 12.25%, and has been a proponent of permitting credit unions to access secondary forms of capital. The GAC, which will take place Feb. 21-25, will give credit union leaders the opportunity to learn the latest, first hand, from influential policymakers, as well as a platform to advocate for credit union issues. The GAC will also feature former Federal Reserve Chairman Alan Greenspan and a point-counterpoint discussion between former Congressman Joe Scarborough and ex-presidential candidate and former Democratic National Committee Chairman Howard Dean.