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Inside Washington (02/02/2009)

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* ALEXANDRIA, Va. (2/3/09)--The National Credit Union Administration (NCUA) sent a Letter to Credit Unions (No. 09-FCU-02) reminding them that the agency last November approved an increased 2009 operating fee scale. The scale is used by the agency to determine the operating fee assessed to federal credit unions. The change increased the operating fee scale by 6.77%. The letter also noted that credit unions will be receiving in March an NCUA invoice for their 2009 operating fee and, if required, for the amount needed to adjust National Credit Union Share Insurance Fund (NCUSIF) capitalization deposits to 1% of insured shares. The fee, assessed based on assets as of Dec. 31, is due to NCUA no later than April 15 … * WASHINGTON (2/3/09)--Financial institutions, including credit unions, may have a long road ahead of them as they comply with new federal credit card regulations. The Office of Thrift Supervision, the National Credit Union Administration and the Federal Reserve Board approved unfair and deceptive credit card regulations Dec. 18 that are slated to go into effect July 1, 2010. The new rules prohibit double-cycle billing and universal default, and prevent institutions from raising interest rates on pre-existing balances unless payments are past due 30 days. The new rules also will prevent credit unions and other financial institutions from treating a payment as late unless a reasonable time is provided from the time a periodic statement is mailed until the payment is due. In addition, when different annual percentage rates (APR) apply to different balances on a credit card account, such as purchases, balance transfers, or cash advances, the final rules require that payments exceeding the minimum payment be allocated to the balance with the highest APR or pro rata among all the balances. Credit unions also are required to comply with recently finalized rules for open-end credit under Regulation Z by July 1, 2010, according to Mike McLain, Credit Union National Association assistant general and senior compliance counsel. The changes are “massive,” and it will likely take credit unions and their vendors all 18 months to comply with both rules, he said ... * WASHINGTON (2/3/09)--Sen. Claire McCaskill (D-Mo.) introduced a bill Friday that would cap the compensation for Wall Street executives so that their pay is no more than $400,000--which is what President Barack Obama makes, the senator said (CNN.com Feb. 2). Under the bill, salaries, bonuses and stock options would be limited. “You can’t use taxpayer money to pay out $18 billion in bonuses,” she said. Obama has said he would limit executive compensation for financial companies that receive assistance from the Troubled Asset Relief Program ... * WASHINGTON (2/3/09)--The Government Accountability Office (GAO) recommended in a report Friday that the Treasury expand its efforts to monitor how recipients of capital infusions from the Troubled Asset Relief Program (TARP) are using the money. The GAO noted that the Treasury has taken important steps to implement the agency’s previous recommendations, but that it has “made limited progress in formatting, articulating and communicating an overall strategy for TARP” ...

New CUNA tool for the CU difference

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WASHINGTON(2/3/09)—The Credit Union National Association (CUNA) has released a new report to back credit unions in their campaign to help the economy by providing more credit to small businesses. As part of its “Straight Talk” series, CUNA produces timely “Straight to the Point” brochures--a series of reports that elaborate on key credit union issues. In its latest effort, CUNA highlights that credit unions “do things differently” by listening to Main Street while “others” listened to Wall Street. “Credit unions are locally based and since they serve their members rather than line the pockets of few, they do things differently,” the new publication boasts. It displays a chart showing that credit unions held onto to 75% of their mortgages while others bundled them into mortgage-backed securities. A second chart illustrates that National Credit Union Share Insurance Fund balances “haven’t faltered” and reminds that the NCUSIF “is not a burden to the American taxpayer. The two-pager notes that a current statutory cap on credit union member business lending is “arbitrary” and was set after close to 100 years of successful business lending by the credit union movement. Removal of the cap in these tough economic times, CUNA and credit unions suggest, would allow credit unions to do even more to help small business members struggling under difficult economic conditions. In fact, “Straight to the Point” notes, a change in the statute could inject $10 billion into the economy the first year the arbitrary ceiling was removed. “This economic stimulus would not cost taxpayers a dime,” the brochure adds. “Let credit union serve their 90 million members.” CUNA has distributed this piece to a coalition of small business interests and will distribute it on Capitol Hill. It will also be available at the CUNA Governmental Affairs conference in Washington Feb. 22-28, and widely available for use by credit unions and the leagues for their Hike the Hill efforts.

Congress Stimulus vote reg restructuring hearing

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WASHINGTON (2/3/09)—The Credit Union National Association (CUNA) will be monitoring legislative action on the floors of both chambers of the U.S. Congress. In the Senate, debate is expected to begin on the House-passed economic stimulus bill. In the House, the stimulus package was opposed by Republicans. The Senate bill is expected to contain changes that give it more of a bi-partisan flavor, however passage is expected still to take some time. This week CUNA also will be following:
* Senate Banking Committee hearing to examine modernizing the U.S. financial regulatory system on Wednesday. Among those expected to testify is Paul Volcker, who heads the President’s Economic Recover Advisory Board and is a former Federal Reserve Board chairman; * Senate Banking Committee hearing to examine TARP-- the Troubled Asset Relief Program, focusing on oversight of the financial rescue program Thursday; and * House Financial Services Committee hearing today on “Promoting Bank Liquidity and Lending Through Deposit Insurance, Hope for Homeowners and Other Enhancements.”
In addition to these hearings, the House Financial Services Committee is expected to consider legislation to make permanent the $250,000 deposit insurance coverage limits that were enacted on a temporary basis in October 2008 as part of the Emergency Economic Stabilization Act. No action is likely this week on H.R. 200, the “Helping Families Save Their Home Through Bankruptcy Act” though it appears to be edging closer to a final vote. This so-called “mortgage cram-down” bill was approved by the House Judiciary Committee last week. Some amendments were adopted at that time, but CUNA remains opposed to the proposal, and continues to encourage sponsors in the House and Senate to narrow the scope and duration of the program.

CUNA Feb. 4 webinar Corporate CU rescue

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WASHINGTON (2/3/09)—Affiliated credit unions can register for a free webinar on the National Credit Union Administration’s (NCUA) corporate credit union rescue plan. Sponsored by the Credit Union National Association (CUNA), the webinar will include CUNA’s assessment of the impact of the NCUA plan on natural person credit unions, as well as the group’s ideas for mitigating those costs. This 90-minute event will feature CUNA and credit union experts on regulation, law, accounting, and other areas. Last week the NCUA announced a plan to bolster the corporate credit union system’s liquidity and said it would be funded via a credit union share insurance premium. Use the resource link below to sign up now for the webinar.

GAC performer Lt. Dans Band in IAmerican ProfileI

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WASHINGTON (2/3/09)--The musical performer at this year’s Credit Union National Association Governmental Affairs Conference (GAC), the Lt. Dan Band, was featured in a cover story this week in American Profile. The Lt. Dan Band is slated to play Feb. 22 at the GAC. The band was formed by Chicago composer Kimo Williams and Gary Sinise, actor/musician and star of “CSI New York,” a TV show on CBS. “Lieutenant Dan” is the character Sinise played in the 1994 film, "Forrest Gump.” The band has completed six tours for the USO and performs regularly for troops. Much like the credit union philosophy of people helping people, Sinise told the magazine that he’s always looking for ways to give back. “People have paid a price for us to have the life we have here,” he told American Profile. “You look at people who live in war zones, where their countries are always fighting and they never seem to get out of it. We’re lucky with the number of people who are willing to volunteer for service here. We should be thankful to them. We can never do enough for our veterans.”