Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive

Washington

Inside Washington (02/04/2010)

 Permanent link
* WASHINGTON (2/5/10)--The National Federation of Community Development Credit Unions commended the Treasury Department for allowing community development credit unions (CDCUs) to access Troubled Asset Relief Program funds. Cliff Rosenthal, federation president, said up to $200 million could be invested in qualifying CDCUs as a result. There are more than 150 credit unions certified as community development financial institutions. More credit unions could qualify for the designation, and the federation plans to work with interested credit unions to help them become certified. Investments through the program will take the form of secondary capital at a rate of 2% for eight years ... * WASHINGTON (2/5/10)--Federal bank and thrift regulators were expected to issue guidance on small business loans as early as yesterday (American Banker Feb. 4). The guidance is expected to caution banks against tightening credit for small business as a result of the financial crisis. Banks should judge borrowers’ creditworthiness and not base loan decisions on a borrower’s industry or geography. Banks also will not be criticized by examiners for lending to small-business, creditworthy borrowers. President Barack Obama has said banks may have tightened credit too much after the market experienced trouble ... * WASHINGTON (2/5/10)--Federal Reserve Board Gov. Kevin Warsh faulted lawmakers for focusing too much time on attempting to combine financial regulators instead of tackling more critical issues (American Banker Feb. 4). Warsh made the comment while speaking to the New York Association for Business Economics. Real regulatory reform depends on figuring out how many regulators are needed or determining the makeup of an oversight council, he said. He also criticized policymakers for not addressing the future of Fannie Mae and Freddie Mac. Also, giving regulators more power to resolve big banks does not go far enough. Greater market discipline is needed to accompany stricter regulation, he added ...

NCUA extends comment period for FOM proposal

 Permanent link
ALEXANDRIA, Va. (2/5/10)--The National Credit Union Administration (NCUA) on Thursday announced that it has extended the comment period for its recently proposed changes to its chartering and field-of-membership rules until April 15. The comment period for the chartering and field of membership changes, which would speed up, simplify, and enhance the objectivity of the community CU charter application and review process, was originally slated to end on March 1. In comments accompanying the announcement, NCUA Chairman /Debbie Matz said that the NCUA has extended the comment deadline “to allow the credit union community ample opportunities to give appropriate consideration” to both the field of membership proposal and proposed revisions to the corporate credit union rule. The comment period for the corporate revisions ends on March 9. If approved, the new rule would set objective and quantifiable criteria to determine the existence of a well-defined local community (WDLC) for areas that encompass multiple group areas. Single political jurisdictions, such as a county, could continue to be the basis for a community charter or addition without having to meet further statistical standards. A new, objective definition for rural districts is also proposed. The NCUA also further clarified its position on the U.S. Treasury’s decision to expand financial institution lending in low-income areas by allowing community development financial institutions, including credit unions, to access funds from its Troubled Assets Relief Program, announcing that the NCUA will “consider an interim final rule” that would “set forth guidelines for participation” at this month’s board meeting, which will take place on Feb. 18.

Consumer awareness of card changes revealed in CFACUNA study

 Permanent link
WASHINGTON (2/5/10)--The level of consumer awareness of protections offered by new credit card requirements, mostly going into effect Feb. 22, is revealed in a fresh survey conducted by the Credit Union National Association (CUNA) and the Consumer Federation of America (CFA), the results of which will be released during a press conference Monday, Feb. 8 at 10 a.m. The Credit Union National Association (CUNA), along with the Consumer Federation of America, on Monday will detail just how much consumers know about the protections imposed by the Credit Card Accountability, Responsibility and Disclosure Act, announcing the results of a recently completed survey at 10 A.M. ET at the National Press Club in Washington. CUNA Chief Economist Bill Hampel and Consumer Federation of America Executive Director Stephen Brobeck will disclose the results of the survey and will also offer tips for prudent consumer credit card use. The survey, which was conducted between Jan. 29-31, reveals consumer awareness of recent changes to the terms of lines of credit, interest rates, fees, and other terms of credit account agreements. The survey also asked whether or not consumers acted as a result of these changes.

New insights from final corp CU town hall

 Permanent link
WASHINGTON (2/5/10)—The National Credit Union Administration (NCUA) continued its frank discussions on corporate credit union issues Thursday and revealed that the agency hopes soon to work out its formal position on legacy assets. At its final live town hall session on corporate issues in Florida yesterday, NCUA Chairman Debbie Matz kept up her call to credit unions to comment on proposed changes to the corporate rules. Matz underscored the value to the agency of all credit union comment and specifically cited the agency’s anticipation of comments to be drafted under the auspices of the Credit Union National Association’s (CUNA’s) Corporate Credit Union Task Force, said VyStar CU President/CEO Terry West, who attended the meeting. West is chairman of the CUNA task force. The deadline for comments submitted directly to NCUA is March 9. CUNA has identified two areas of concern regarding legacy assets. First is the question: Can former capital holders, whose capital has been depleted, have their capital restored in the future if ultimate losses on the legacy assets turn out to be much less than expected. The second issue is whether, going forward, new capital depositors will be at risk if further losses occur on the legacy assets, that is, if losses turn out to be worse than expected. At a previous meeting in Dallas, Texas, NCUA staff said before a new rule is in place, the agency must find a way to wall off new capital from further losses if natural-person credit unions are to continue to capitalize the system—and that such credit union participation is crucial to an ongoing system. (News Now Jan. 25) At this week’s meeting, agency staff reiterated that the NCUA is working closely with the U.S. Treasury Department on this issue. Agency staff also said they anticipate the future looses for the corporates will aggregate between 80-100 basis points over a 5-7 year period. Although the meeting Thursday is the last live meeting offered by the NCUA, stakeholders have one last chance to participate in the discussions via an online session scheduled for Feb. 18. (See related story: Final chance for an NCUA session on corp CUs) Use the resource links below for more information on the NCUA corporate credit union restructuring plan.

Final chance for an NCUA session on corp. CUs

 Permanent link
ALEXANDRIA, VA. (2/5/10)—The National Credit Union Administration (NCUA) wrapped up its series of live Town Hall meetings on corporate credit union issues in Florida yesterday, and reminds stakeholders there is one more change to participate before the comment period on proposed changes to the system ends March 9. The NCUA will conclude its series of two-way conversations with the credit union industry by hosting a virtual Town Hall meeting Thursday, Feb. 18, 2010. The agency encourages those who were unable to attend a live Town Hall meeting, or those with additional thoughts or comments to register for the online session. This series of meetings, the second initiated by the NCUA, started in September and has been billed by the agency as a “nationwide listening tour." The final session in Florida featured a crowd of over 125 credit union stakeholders and detailed discussion of the proposed corporate rule and related issues, such as the proposed field-of-membership rule, alternative capital, and continuing economic challenges facing natural-person credit unions. To participate in the virtual session, register meeting by accessing “Upcoming Events” using the link below.

Financial Services to study future of housing finance

 Permanent link
WASHINGTON (2/5/10)—The House Financial Services Committee Thursday announced new upcoming hearings including one that will scrutinized the future of housing finance on March 2. The hearing will begin a process, according to the committee announcement, that will focus on all private and public entities that support the mortgage market, a list that includes the Federal Housing Administration, Ginnie Mae, Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and private lenders and securitizers. Saying it is a first step in a legislative process to determine the future of housing finance and the federal government’s role in responsible homeownership and the supply of affordable rental housing, Committee. Chairman Barney Frank (D-Mass,) noted the panel has invited Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan to testify on the administration’s perspective. Although a witness list is not expected to be made public until closer to the hearing date, the committee notice said representatives of the advocacy community, academia, and industry are being asked to present their ideas on the future of housing finance. Also newly announced, the committee has scheduled a Feb. 10 hearing on “Unwinding Emergency Federal Reserve Liquidity Programs and Implications for Economic Recovery.” Expected to testify are Federal Reserve representatives, academics, economists and “other experts on the policy implications of unwinding emergency Federal Reserve liquidity facilities and the potential impact on inflation, job growth and overall economic recovery.” And on Feb. 11, the House Small Business Committee will conduct a joint hearing with the Financial Services Committee to examine the condition of small business and commercial real estate lending in local markets.