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CUNA statement urges Senate action on MBLs

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WASHINGTON (3/3/10)--The Credit Union National Association (CUNA) continues to encourage legislators to support S. 2919, the Small Business Lending Enhancement Act, calling the member business lending (MBL) legislation "a job creation bill that would not cost the taxpayers a dime and would not increase the size of government." CUNA made the comments in a statement submitted for the record of a hearing Tuesday by the Senate Banking subcommittee on economic policy, entitled “Restoring Credit to Main Street: Proposal to Fix Small Business Borrowing and Lending Problems.” In the statement, CUNA urged support of S. 2919, which would increase the credit union MBL cap from 12.25% to 25% of a credit union’s total assets and would increase the "de minimus” threshold for member business loans from $50,000 to $250,000. CUNA has estimated that the increased MBL cap would free an extra
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Inside Washington (03/02/2010)

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* WASHINGTON (3/3/10)--Minority Leader John Boehner
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(R-Ohio) visited Kemba CU in West Chester, Ohio, on Monday. Credit union officials encouraged his support for raising member business lending caps for credit unions, and standing with credit unions against overdraft protection and interchange legislation. From left are: Tom Thole, Kemba CU board member; Raymond Schaefer, Kemba board chair; Boehner; Steve Behler, Kemba President/CEO; and Jerry Ziegelmeyer, Kemba board member. (Photo provided by Kemba CU) ... * WASHINGTON (3/3/10)--National Credit Union Administration (NCUA) Chairman Debbie Matz and National Treasury Employees Union (NTEU) President Colleen M. Kelly signed an agreement Tuesday creating an NCUA/NTEU Partnership Council. This is the first such agreement between a federal agency and NTEU responding to President Obama’s order on labor management collaboration. The council, headed by Matz and Kelly, includes six NTEU members and six NCUA management officials. The partnership recognizes employees as NCUA’s primary resource, and encourages active participation to ensure the agency delivers high quality service to credit unions and the public. The partnership also will encourage and enhance involvement of NCUA employees in the decision making process regarding issues in the workplace. The first meeting will take place this month in Washington, D.C. ... * CLEVELAND, Ohio (3/3/10)--The Federal Reserve Banks announced Tuesday that they have completed the reduction in paper check processing infrastructure that began in 2003. With the discontinuation of paper check processing at the Atlanta office on Friday, all paper check processing is now handled at the Cleveland, Ohio, office. The Atlanta office serves at the banks’ location for electronic check processing. Since 2003, the banks have reduced the number of locations where paper checks are processed from 45 offices to a single office in Cleveland. The changes were made in response to the significant rate of adoption of Check 21-enabled services and the shift from paper checks toward electronic payments. (SEE RELATED: CUNA Compliance: CUs need to review check-hold disclosures ... * WASHINGTON (3/3/10)--Donald Kohn’s pending resignation from his post as vice chairman at the Federal Reserve board is bringing back concerns over the Fed’s independence from the Obama administration. After Kohn leaves, there will be three vacancies on the Fed board (American Banker March 2). The administration would then have the opportunity to have a long-term impact on the central bank by picking the next board members. President Barack Obama nominates board members for 14-year terms. Nominations are then confirmed by the Senate. The administration said Monday it would move quickly with Kohn’s successor. Kohn has worked for the Fed for 40 years and has been a board member since 2002 ... * WASHINGTON (3/3/10)--Comptroller of the Currency John Dugan said Monday that regulators and financial institutions must protect safety and soundness over credit availability. In a speech Monday before attendees of a banking industry conference, Dugan said that regulators should err on the side of safety and soundness over longer-term enhancements to capital and liquidity requirements (American Banker March 2). His comments come as a Senate Banking subcommittee was scheduled Tuesday to discuss small business lending and credit availability. On Friday, Dugan and other regulators testified before the House Financial Services Committee on the same topic. The Credit Union National Association also was present at the hearing to encourage lawmakers to lift the caps on member business lending at credit unions ...

Bipartisan group urges House leaders on MBL cap lift

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WASHINGTON (3/3/10)--A coalition of legislators earlier this week asked House Speaker Nancy Pelosi (D-Calif.) and House Minority Leader John Boehner (R-Ohio) to “do more to support America’s small businesses by modifying the statutory limitations that have currently prevented many credit unions from doing more to advance the economic recovery.” The letter, which was signed by 58 members of the House, specifically supported legislation introduced by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) that would lift the current 12.25% asset cap on member business loans serviced by credit unions to 25% of a given credit union’s total assets. The legislation would also increase the “de minimis” threshold for these loans to $250,000. Reps. Carolyn Maloney (D-N.Y.), Fortney Stark (D-Calif.) and Chellie Pingree (D-Me.), who were three of 34 new co-sponsors who agreed to support lifting the MBL cap following visits by credit union representatives during last week’s Governmental Affairs Conference, signed on to the letter. While “many financial institutions have pulled back on making small business loans as a result of the financial crisis” and regulators have noted that “banks—both large and small—have shrunk their business loan portfolios,” the letter noted that “credit unions remain willing to lend to their small business-owning members.” The letter also cited Credit Union National Association estimates which predict that lifting the MBL cap would result in $10 billion in new capital for small businesses, creating as many as 100,000 new jobs at no cost to American taxpayers. While the amount of small business loans would double to a total of 10% if the MBL cap is raised, the banking industry would still dominate the business loan market, with 90% of the total share of loans. “Any future jobs-creation legislation that the House considers” should include MBL legislation, the letter added.

CDFI to review its 15 year-old authorizing statute

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WASHINGTON (3/3/10)--As it enters its fifteenth year of existence, the U.S. Treasury’s Community Development Financial Institutions (CDFI) Fund is “undertaking a holistic review” of its “entire authorizing statute,” and has asked the public to comment on its operations. The CDFI Fund is inviting “potential CDFI applicants, community development trade groups and members of the general public” to comment on the CDFU, with a specific request for input on the CDFI Fund’s “Financial and Technical Assistance awards, the Native American CDFI Assistance awards, the Bank Enterprise Awards, and CDFI certification, among other areas.” In the release, CDFI Fund Director Donna Gambrell encouraged the public “to provide detailed comments that will be used to formulate future policy and legislative proposals that will increase our support to CDFIs.” The comments, which will aid the CDFI Fund as it examines whether any “technical corrections, substantive changes, or new provisions” should be added to its authorizing statute, must be made by April 1. The CDFI Fund said it is also planning to gather additional commentary through a series of “national listening sessions” that will be held in economically distressed communities. For the full release, use the resource link.

CU concerns reflect systems issues From the GAC

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WASHINGTON (3/3/10)--While the broader concerns of the credit union movement were aired and, in some cases, allayed on stage at last month’s Credit Union National Association (CUNA) Governmental Affairs Conference (GAC), there was still much on the minds of conference attendees, who ranged from volunteers, to current CEOs, to recent retirees. The big ticket items for credit unions, such as potential action on interchange fees and overdraft protections, as well as the member business lending (MBL) cap, were all concerns for Schools First FCU’s Shelley Berryman, who said that these issues had particular relevance In her home state of California. MBLs, which have been an important focus of CUNA’s work in recent weeks, were also a primary issue for Nikkei CU CEO Erick Orellana, who said that his credit union, which is currently up against the 12.25% of assets cap imposed by existing regulations, would “open the flood gates” if that cap is lifted. And while Orellana said he is concerned by the state of the corporates, he said that his credit union does not depend on the corporates for investments, opting to use their access to payment systems. The corporate situation was also on the mind of Clinchfield FCU’s Sandy Lingerfelt, who said that she did not want to see her corporate credit union, which bore little to no responsibility for the current corporate credit union situation, punished for the misdeeds of other corporates. The sometimes overarching effects of regulations are a main concern for Wichita FCU Director John Davis, who told News Now that overregulation stifles some of the work his credit union tries to do, with a lack of interpretation, understanding, and enforcement of those regulations only serving to exacerbate his credit unions's issues. However, speaking as a newly-minted industry outsider, Robert Bianchini, who recently retired after many years of service with the Oklahoma and Rhode Island credit union leagues, said that, in spite of the recent “hard times” that have befallen the economy, credit unions have “wonderful opportunities” before them, particularly with respects to their relationship with small businesses. Small business lending is “a void begging to be filled,” Bianchini added. The opinoins are the result of random person-on-the-street interviews by News Now with credit union representatives waitng to meet the National Credit Union Administration board members at a reception during the GAC.