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House Hearing on CU Reg Relief Set for March 6

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WASHINGTON (2/28/08)--The Credit Union National Association (CUNA) will be among those testifying at a hearing on regulatory relief options for credit unions that the House Financial Services Committee has planned for March 6. The full-committee hearing’s focus will be on the need for credit union regulatory relief and improvements. Major discussion is expected to be devoted to the provisions in the Credit Union Regulatory Improvements Act, H.R. 1537, introduced by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.). CUNA President/CEO Dan Mica said Wednesday that the scheduling of a hearing during a heated election year in which major issues are being discussed nationally shows how credit unions have become front and center in the minds of Congress. “While we have the attention, we will take the opportunity to make our cases for greater regulatory relief for credit unions, particularly in the areas of expanding business lending to members, granting more flexibility in net worth requirements and allowing all types of credit unions to serve underserved areas,” Mica said in announcing the hearing. He added, “While we realize there are no guarantees, a hearing does serve to build further support in Congress for our legislative goals and enhances the likelihood Congress will take action on credit union legislation.” CUNA Vice Chairman Tom Dorety, CEO of Suncoast Schools FCU, Tampa, Fla., will testify for CUNA. Other groups expected to testify include the National Credit Union Administration, the National Association of State CU Supervisors, the National Association of Federal Credit Unions and a banking industry representative. “This is a very positive development,” said Ryan Donovan, CUNA vice president, legislative affairs. “It is the first time in nearly five years the House Financial Services Committee has focused exclusively on ways to provide credit unions with regulatory relief, giving our issues great visibility before this key committee and positioning us well for future action.” Donovan said the steady momentum behind CURIA, which now has 143 cosponsors as the result of the CU system’s grassroots lobbying efforts, created impetus for the hearing, which takes place on the final day of CUNA’s 2008 Governmental Affairs Conference. Both CURIA chief sponsors Royce and Kanjorski will be speaking at the GAC. Donovan also said the regulatory improvements likely to be discussed at the hearing will not be limited to those in CURIA. “We expect to discuss additional ways Congress can provide regulatory relief to credit unions,” he said. “New ideas will be put on the table and we look forward to having that discussion with committee members.”

Inside Washington (02/27/2008)

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* WASHINGTON (2/28/08)--A hearing scheduled for today regarding compensation packages for executives from Countrywide Financial Inc., Citigroup and Merrill Lynch and Co. has been postponed to accommodate the schedules of witnesses (American Banker Feb. 27). A House committee is investigating the executives’ salary and retirement packages after the companies lost money in the housing crisis ... * WASHINGTON (2/28/08)--The Federal Deposit Insurance Corp. (FDIC) plans to beef up its staff in the Division of Resolutions and Receiverships as problems continue to arise in the housing market (Dow Jones Feb. 27). The FDIC is planning to bring 25 retirees back, many of whom worked for the agency during the savings and loans crisis in the late 1980s. The FDIC currently has 223 employees in the department, based in Dallas ...

CUNA-AACUL spotlight regulatory concerns

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WASHINGTON (2/28/08)--The Credit Union National Association (CUNA) and the American Association of Credit Union Leagues (AACUL) have been meeting with federal regulators on subjects of growing concern to credit unions, such as mergers, field of membership (FOM), and examination issues. “Our attempt is to begin a dialogue on these issues between credit unions and the National Credit Union Administration (NCUA) in a cooperative way,” CUNA Deputy General Counsel Mary Dunn explained Tuesday. CUNA President/CEO Dan Mica and AACUL Chairman Rosie Holub backed up the meetings with a letter to the three members of the NCUA board, which emphasized credit unions’ concerns. In their joint letter, CUNA and AACUL discussed the roles of credit unions and examiners during the current climate of widespread mortgage and economic problems facing the country, as well the other key issues. Regarding the country’s mortgage market problems, the letter said credit unions should be encouraged to develop and participate in lending programs that allow them to work with their members, as they have in the past, and consistent with their purpose and mission, to modify mortgage loans as a means of avoiding the higher cost of foreclosure. “In addition, and in a measured and prudent way, credit unions should also be able to provide loans to others eligible to join the credit union who may have obtained problematic loans elsewhere,” Mica and Holub wrote to the NCUA board. They said examiners play a determinative role in facilitating or limiting such service at any time, but particularly during this economic downturn. The credit union leaders added that credit unions should have reasonable flexibility to develop workout plans for eligible members, as well as others in the field of membership who want to join as long as the credit union’s safety and soundness are not jeopardized in the process. In addition to Holub, of Missouri, and CUNA representatives, five additional state league presidents participated in the meetings with NCUA: John Dill of Colorado, Bill Cheney of California, Dick Ensweiler of Texas, Paul Mercer of Ohio, and Dave Adams of Michigan.

Mica urges NCUA on with its FOM policy plan

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WASHINGTON (2/28/08)--The Credit Union National Association (CUNA) is urging the National Credit Union Administration to move forward with field of membership improvements for community credit unions. The NCUA’s objectives to change chartering and field of membership (FOM) policies regarding community chartered credit unions are positive, but the current proposal needs some changes, the group said in a recent letter. The comment period ended in August and CUNA is encouraging NCUA not to let the goal of an improved process for community charters falter. The CUNA letter was a follow up to meetings with federal regulators on subjects of growing concern to credit unions, such as proposed field of membership (FOM) changes, as well as mergers and examination issues. (See related story, “CUNA-AACUL spotlight regulatory concerns") CUNA President/CEO Dan Mica wrote to the NCUA reiterating CUNA’s strong support of the agency’s June 2007 FOM proposal, while offering suggested improvements. CUNA supported proposed continuation of the NCUA's treatment of single political jurisdictions. CUNA said the process allows a community federal credit union (FCU) to apply for a single city, county or portion of either, under a streamlined procedure. It presupposes the area constitutes a well-defined local area. The letter also reiterated support of the NCUA's intent to establish a parallel presumption for multiple jurisdiction federal credit unions seeking community charters. The proposal would use a standard statistical definition of a "well-defined community" based on the "Core Based Statistical Area" (CBSA) as defined by the Office of Management and Budget. Among problems with the agency plan, the letter noted that credit unions would like to see modifications in a notice and comment process proposed by the agency, and streamlined documentation requirements to add underserved areas. Also, the letter suggested that the NCUA's plan to request comment on issues relating to mergers involving community credit unions should be broken out of the field of membership proposal and looked at separately.