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Mica notes CU boots on the ground in Hill publication

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WASHINGTON (2/25/10)--Self-declared “flaming moderate” and Credit Union National Association President/CEO Dan Mica urged his K Street colleagues to be "particularly mindful" of the need to avoid being perceived as a Republican or Democratic organization in today's more polarized political environment. Mica, who in his latest monthly installment of The Hill's "K Street Insider" column, warned against leaning too far to either the left or right, has learned to avoid this from his years of experience in an evenly split legislative district while serving as U.S. congressman from south Florida. This type of district gave him "great latitude and, at times, massive headaches" from knowing that whenever he voted, he would upset "nearly half" of his constituency. As a result, he eliminated the 10% to 15% of constituents on the fringes and stuck to the middle ground. Mica said the more than 4,000 credit union activists in Washington this week visiting Capitol Hill during CUNA's Governmental Affairs Conference would be "particularly mindful" to avoid being perceived as Republican or Democrat when lobbying on behalf of credit unions, which have bipartisan support in Congress. While "we all have our (personal) preferences," Mica said he knows that "the key to lobbying for associations such as CUNA is is keeping the eye on the agenda and what is best for the organization," adding: "There is wisdom in being neutral and keeping one’s political passions focused on the collective cause." Mica is one of a select group of former policy makers who write The Hill's "K Street Insider" column in rotation each month.

CUNA blog offers constant coverage of 2010 GAC (02/24/2010)

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WASHINGTON (2/25/10)--Up-to-the-minute coverage of the latest news and notes from the Credit Union National Association's (CUNA) 2010 Governmental Affairs Conference (GAC) will continue to be available on the GAC Blog until the conference closes later today. More than 4,000 credit union representatives are in town for CUNA's premier conference featuring addresses by top policymakers, and more. CUNA Editorial Communication Vice President Lisa McCue, Web Assistant Editor Tiffany Stronghart, and Communications Specialist Darryl Tait continue to provide frequent convention updates. Also, for full coverage, read CUNA's daily online news service News Now. The CUNA GAC Daily will be distributed to conference attendees and News Now readers will have access to its electronic version. The League of Southeastern Credit Unions is also getting in on the act, posting its own videos online at www.lscu.coop. Use the resource links below to access the GAC Blog and GAC videos from the League of Southeastern Credit Unions.

Sherman MBL alt. capital opposition doesnt make sense

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WASHINGTON (2/25/10)--Rep. Brad Sherman (D-Calif.) on Wednesday told credit union advocates to be proud that they were attending the largest assemblage of financial institutions “where no one has taken any TARP money.” The assemblage, the Credit Union National Association's Governmental
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Affairs Conference (GAC), officially ends today, and Sherman told attendees at Wednesday's general session that he would work toward legislative fixes to increase the member business lending cap, as well as provide alternative sources of capital for credit unions. “Wall Street needed more capital-we gave them more than $700 billion. Look at credit unions. No one is asking for a bailout or a federal investment of money. It doesn’t make sense how Congress can inject capital over here and serve as a barrier over there,” Sherman said. Sherman also reflected on some of his earlier work on behalf of credit unions, citing legislation to allow credit unions to provide remittances. Sherman also noted legislation he expects will pass that creates a fund to bail out failing institutions. At one time that bill included assessments on some credit unions, but now excludes every credit union in the country, he said.

Dean Scarborough agree to disagreeexcept on CUs

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WASHINGTON (2/25/10)--When Howard Dean and Joe Scarborough entered the stage to close Wednesday’s general session, they immediately agreed to disagree. But one of the things they did agree on was the fact that credit unions need the ability to expand member business lending, and they need alternative capital. Dean, former head of the Democratic National Committee, and Scarborough, host of MSNBC’s “Morning Joe,” spoke at the Credit Union National Association’s Governmental Affairs Conference in Washington, D.C., which wraps up today. The former politicians gave advice to credit unions on how to get what they need from lawmakers. Visits to Capitol Hill aren’t enough, Dean said. “You need a grassroots effort” to push your initiatives through. But get members involved because the peoples’ “votes will do it.” Scarborough advised credit unions to “use your grassroots army like nothing else.” “I’ve never seen a better lobbying effort in the late 1990s than what credit unions put forth,” Scarborough said, referring to credit unions’ campaign to pass H.R. 1151. “It wasn’t coming from K St. It came from credit union members, e-mailing me, people coming to my office.” Though Scarborough and Dean disagreed on items such as healthcare and jobs, Scarborough noted some positive bipartisan developments. He said he expects a Senate jobs bill to pass with Republican support, and Republicans and Democrats are teaming up to discuss tax cuts. With high unemployment rates, he also added that a jobs bill would help the economy grow.

Inside Washington (02/24/2010)

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* WASHINGTON (2/25/10)—Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has delayed the release of his regulatory reform bill. His office said last week the bill would be introduced soon, but pending votes on health care legislation and other disputes over the reform bill will likely prevent it from surfacing (American Banker Feb. 24). Dodd has been working on a discussion draft that he released in November. He had aimed to pass the bill out of the committee in March … * WASHINGTON (2/25/10)—The Volcker rule—which aims to ban proprietary trading and is named after former Federal Reserve Board Chairman Paul Volcker--could be scrapped, according to financial observers (The Wall Street Journal). President Barack Obama proposed the rule in January as part of a broader package to reform financial regulation. Some lawmakers have resisted the measure. Next week, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) and other lawmakers could introduce a plan that would provide regulators with more discretion to limit risky trading at banks. The measure wouldn’t ban trading outright, however … * WASHINGTON (2/25/10)--Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported a profit of $914 million in the fourth quarter of 2009, a $38.7 billion improvement from the $37.8 billion net loss the industry sustained in the fourth quarter of 2008, but still well below historical norms for quarterly profits, the FDIC said in a release Tuesday. More than half of all institutions---50.3%--reported year-over-year improvements in their quarterly net income. "Consistent with a recovering economy, we saw signs of improvement in industry performance," said FDIC Chairman Sheila C. Bair. "But as we have said before, recovery in the banking industry tends to lag behind the economy, as the industry works through its problem assets." Other findings FDIC noted: full-year revenues were higher than in 2008, and the number and assets of institutions on the agency’s problem list rose to 702 as of December, from 552 on Sept. 30. Assets of problem institutions increased to $402.8 billion from $345.9 billion. FDIC’s liquid resources also rose to $66 billion at year-end from $23 billion at the end of September … * WASHINGTON (2/25/10)—The Treasury Department will resume its supplementary financing account to lend to the Federal Reserve, the department said Tuesday. The department created the account in September 2008, but it was halted because it almost reached its mandatory debt ceiling, said American Banker (Feb. 24). Congress voted last year to increase the limit to $200 billion from $5 billion. The Treasury will host $25 billion auctions during the next eight weeks. The first auction was to begin Wednesday … * WASHINGTON (2/25/10)--Delivering the Federal Reserve's semiannual monetary policy report before the House Financial Services Committee on Wednesday, Fed Chairman Ben Bernanke said that the Fed will need to maintain extremely low interest rates over an "extended period" to aid the United States economy as it continues its recovery. Bernanke added that the Fed is considering additional moves to make when interest rates go back up...

NCUAs Fryzel discusses alt capital CU topics

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WASHINGTON (2/25/10)—The National Credit Union Administration (NCUA) believes it is up to the U.S. Congress to determine policy on alternative capital for credit unions and the agency stands ready to implement new options for credit unions if Congress decides it is needed.
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So says NCUA board member Michael Fryzel, who was among the Wednesday speakers at the Credit Union National Association’s (CUNA’s) Governmental Affairs Conference. “This is a tool many credit unions feel will help them build capital and remain competitive,” he said. “It is certainly not for all credit unions, and especially not for those struggling to remain viable.” Support for broadening sources of capital was among several issues discussed by Fryzel during the annual session. He said the NCUA was aware that the credit union commitment to the consumer was especially relevant during the current financial crisis. On the alternative capital issue, Fryzel said, “Congressional action (to authorize new capital sources) is required and NCUA has communicated to Congress that they may wish to explore giving this authority to credit unions.” He added, “..And if they do, we stand ready to implement the required guidelines to make acquiring alternative capital a safe and sound practice.” On another subject Fryzel said the NCUA’s study of existing merger criteria remains a high priority. He acknowledged credit union concerns that well-managed credit unions are not included in the merger-consideration process and are unable to grow because of that. He also noted there is some belief that the procedures used to consider merger candidates are not clear and that it results in distrust of the system. The NCUA is committed, Fryzel said, to implementing changes where needed to make the process open and competitive. Fryzel noted that one of the important missions of CUNA’s GAC was visits of credit union representatives to congressional offices. He said this was especially critical in this time of economic crisis. “..This year more than ever, the efforts you make and the progress you achieve will resonate for years to come,” he said.

Dodd CUs are good for America

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WASHINGTON (2/25/10)--Sen. Christopher Dodd (D-Conn.) encouraged credit unions to continue to expand their activism in politics and finance, and help the nation recover from current economic stresses. Dodd, who is chairman of the Senate Banking Committee, has long been
Click to view larger image CUNA honored retiring Sen. Christopher Dodd (D-Conn.) with a resolution citing the federal lawmaker's many accomplishments in both the Senate and the House. Dodd returned the compliment saying he will "always remain a strong supporter of credit unions." (CUNA photo)
involved in shaping legislation impacting financial institutions. He is retiring this year after five terms in the U.S. Senate and two in the U.S. House. During a speech Wednesday to the Credit Union National Association’s (CUNA’s) Governmental Affairs Conference (GAC), the Connecticut Democrat reminded the audience that credit unions have been a force in helping citizens realize the American dream. "Now," he said, "the dream is slipping away because of greed within the financial system, and failure of the regulatory structure." Dodd, a consistent supporter of credit unions, said the challenge to correct this fits in with the credit union mission. "Credit unions are good for America," he added. "They serve 90 million credit members who would have nowhere to turn." The senator was honored during the GAC meeting in a CUNA resolution citing his contributions. Dodd returned the compliment. "I leave the U.S. Senate without knowing what my future will be,” he said, "but I know one thing—that is I will always remain a strong supporter of credit unions." Reporting from the GAC, Reuters wrote that Dodd told reporters after his speech that he expects lawmakers will soon be able to reach a bipartisan agreement on financial regulatory reform—working past an earlier seeming impasse. When pressed for a timetable, Dodd declined to give specifics but added he expected to get agreement “soon.” Taking the GAC podium just before Dodd, Sen. Mark Udall (D-Colo.) ventured that a comprehensive Senate regulatory reform package could be on the floor of the Senate by May. (See related story: Udall ‘excited’ about MBL bill potential.)

CUs can help put Americans to work says Perlmutter

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WASHINGTON (2/25/10)--It’s time to put more Americans to work and
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that’s where credit unions come in, Rep. Ed Perlmutter (D-Colo.) said Wednesday. “We need to get money to small businesses so they can put people back to work,” he said, confirming his support for easing limitations on credit union member business lending. He was addressing the Credit Union National Association's Governmental Affairs Conference, which has drawn more than 4,000 credit union representatives to Washington, D.C. Perlmutter noted the nation’s ongoing economic challenges, but urged attendees not to forget the turmoil from which the United States has emerged:
* From 2007 to February 2009, the Dow Jones Industrial fell 7,000 points. During 2009, it gained 4,000 points; * In the fall of 2008, Fannie Mae and Freddie Mac went into conservatorship and there were several major bank failures; and * In January 2009, the economy lost 785,000 jobs. In January 2010, 20,000 jobs were lost. “That’s not good, but it’s much better,” Perlmutter said.
“There’s a light at the end of the tunnel,” he continued. “You’ll serve a great purpose in getting us to that light.” Perlmutter thanked Colorado credit unions for supporting his political career from the start, beginning with a 2004 run for the state senate. “In Colorado, if you have credit unions’ support, it’s hard not to win a campaign. There a lot of Colorado credit union people here today, and they know they have a friend in me.”

Bachus Congress has more reg reform work ahead

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WASHINGTON (2/25/10)—The ranking Republican member of the House Financial Services Committee said Wednesday that he thinks the U.S. Congress has missed the mark and has not addressed some issues that
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played a prominent role in the recent financial meltdown. “The CEO of Toyota was on Capitol Hill yesterday and he said he’s not sure if they’ve fixed all their problems,” Rep. Spencer Bachus, of Alabama, told attendees at the Credit Union National Association’s Governmental Affairs Conference here. “The same could be said of Congress--we’re not sure if we’ve fixed all the problems that caused the recent financial meltdown.” Bachus added, “We need to be careful not to paint with too broad of a brush as we try to identify the culprits and enact solutions. All financial institutions didn’t cause the meltdown. All Wall Street firms weren’t part of the problem.” Bachus identified areas that he believes need additional attention from federal lawmakers as they scrutinize the financial meltdown:
* Credit reporting agencies: “We have not adequately addressed the role they played in all this.” * Housing policy: “We all assumed everyone should own a home, but not everyone could afford a home. Consequently, people took on too much debt.” * Too big to fail: “The thinking that some institutions are too big to fail is wrong because that implies institutions like yours are too small to save.” * Spreading mortgage risk. “Taxpayers—even those who rent apartments—have now assumed 95% of the mortgage risk in the U.S., and that’s not fair.”

New financial regulation wont harm CUs Frank says

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WASHINGTON (2/25/10)—Congress is about to pass the most significant piece of financial regulation legislation since the New Deal, but the legislation will not “make it harder for you to perform your services,” Rep. Barney Frank (D-Mass.) told credit union representatives Wednesday.
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Frank spoke at the general session of the Credit Union National Association’s (CUNA’s) Governmental Affairs Conference. He also emphasized that credit unions didn’t cause the nation’s economic problems, and therefore would not be penalized. Repeating a remark he has made publicly over the last year, Frank told attendees of the conference, “If mortgages were only made by credit unions, we wouldn’t be in this crisis.” The crisis was largely caused by unregulated financial institutions—and if the new legislation is enacted, check cashers and payday lenders would be most affected by the changes. Frank also noted that in drafting the legislation, lawmakers will take the principles that credit unions operate under and apply them to all financial institutions. Frank also spoke about three significant items of interest to credit unions:
* Overdraft fees: Legislation has been proposed that would limit overdraft fees to once a month, for a maximum of six times per year. CUNA opposes this legislation because it would hinder credit unions’ ability to provide overdraft protection to members. Frank said that limiting the fees would be a mistake; * Member business lending: The issue is very controversial, and therefore lawmakers in the House “don’t want to walk the plank without knowing what the Senate will do,” Frank said. However, he encouraged credit unions to continue lobbying in favor of an increased cap on business loans to their members; * Interchange fees. CUNA opposes government intervention in setting interchange fees. Frank said they would not be in the agenda this year.
Overall, Frank expressed his support for increasing the credit union movement’s powers to benefit the economy. “Keep up your good work,” he said.

Udall excited about MBL bill potential

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WASHINGTON (2/25/10)--Sen. Mark Udall (D-Colo.) on Wednesday told credit union representatives at the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC) that Congress would pass his member business lending bill, S. 2919, with their help.
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Udall's bill would allow credit unions to increase the number and amount of loans given to members with small businesses by lifting the MBL cap to 25% of assets. The bill would also raise the "de minimis" threshold for a loan to be considered a member business loan to $250,000. Udall said that he has heard "scores of stories nationwide" that make him excited about the potential of his bill. CUNA has estimated that the MBL reforms would create over 100,000 new jobs and increase small business lending by $10 billion within the first year following enactment. For Udall, unemployment remains high on his list of concerns, and while federal stimulus funds have helped alleviate this issue somewhat, he said that Congress must help employers expand their businesses and hire again. The U.S. Congress must look for "job creation policies that are deficit neutral," and find "simple cost effective ways" to do such, Udall added. Congress should not allow any further government help for the banks until the government does more to help credit unions that could, in turn, help businesses, without spending a dime of taxpayer money. Addressing the ongoing debate over financial regulatory reform, Udall said that he is "familiar" with credit union concerns on many regulatory issues, adding that he would judge any potential regulatory reform proposals on whether or not they protect taxpayers and consumers. Udall hinted that a comprehensive Senate regulatory reform package could be on the floor of the Senate by May. Sen. Christopher Dodd, Senate Banking Committee chairman, also indicated at the GAC that a regulatory reform package would be ready “soon.” (See related story: Dodd: CUs are good for America) Closing his remarks, Udall said that he is awed by the "passion" of both credit union members and employees have for credit unions, and called the credit union movement an example of the "American spirit."