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Inside Washington (03/21/2008)

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* WASHINGTON (3/24/08)--The Treasury Department will expand savings opportunities for investors beginning with 13- and 26-week bill auctions April 7. All Treasury marketable bills, notes, bonds, and Treasury Inflation-Protected Securities will be available to the public in minimum and multiple amounts of $100. The new minimum and multiples will apply to outstanding Treasury marketable securities April 7. Previously, the securities could only be transferred in increments of $1,000 ... * WASHINGTON (3/24/08)--Federal bank, thrift, credit union and Farm Credit System regulatory agencies requested public comment Friday on new and revised interagency questions and answers on flood insurance. The proposed changes include modifications to questions and answers about construction loans and condominiums. New questions and answers also are proposed for second lien mortgages, imposition of civil money penalties and loan syndications/participations. Comments are due May 20 ...

CU presence remains on FASB small-business committee

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WASHINGTON (3/24/08)—Credit union executive Scott Waite has been appointed for a second term on the Financial Accounting Standards Board’s (FASB’s) Small Business Advisory Committee (SBAC). Waite is chairman of the Credit Union National Association’s (CUNA's) Accounting Task Force, as well as chief financial officer of Patelco CU in San Francisco. When appointed in 2004, Waite became the first credit union representative on the SBAC. He is also CUNA's representative on the FASB Advisory Council. FASB is the primary private-sector organization that establishes standards of financial accounting and reporting in the U.S. Its standards govern the preparation of financial reports for all public and private enterprises. As a member of FASAC and the SBAC, Waite advises the FASB on how issues related to Generally Accepted Accounting Principles (GAAP) will affect credit unions.

CUNA NC league join in bankruptcy suit

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WASHINGTON (3/24/08)—The Credit Union National Association (CUNA) and North Carolina CU League (NCCUL) have filed a joint amicus brief in support of Coastal FCU, Raleigh, and its lawsuit involving a bankruptcy reaffirmation agreement. The credit union has a case on appeal in the U.S. District Court for the Eastern District of North Carolina. Coastal FCU is the 2nd largest credit union in its state with over $1.7 billion in assets and over 160,000 members. The case involves a member’s automobile loan from the credit union made in February 2005. The borrowers filed a Chapter 7 bankruptcy in May 2007 and signed a reaffirmation agreement with the credit union, without representation by an attorney, in order to retain their automobile. Because the debtors were not represented by an attorney during negotiation of the reaffirmation agreement, the court scheduled a hearing to determine whether the reaffirmation agreement imposed an undue hardship on the debtors, according to Mike McLain, CUNA’s assistant general counsel and senior compliance counsel. The situation could also arise where debtors are not represented by an attorney at all during the bankruptcy process. The court declined to approve the reaffirmation agreement and stated that the debtors could retain the automobile as long as the loan was not delinquent and they continued making payments. “The Court’s decision essentially revived the ‘ride-through’ that was eliminated by the new bankruptcy law enacted through the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA),” McLain said. He added that Coastal’s brief in the appeal, as well as the CUNA-NCCUL amicus brief, argue that Congress intended to eliminate the ‘ride-through’ when it enacted the BAPCPA. The term refers to an interpretation of former bankruptcy laws that permits a debtor to keep the loan collateral, such as an automobile, without either reaffirming the debt or redeeming the loan as long as timely payments continue. Today most courts, McLain said, interpret that law to say there are just three valid actions, which are: surrendering the collateral with no further liability; keeping the collateral through a reaffirmation agreement; or redeeming the collateral through a lump-sum payment. “Most bankruptcy courts agree that the BAPCPA eliminated the ride-through option and now requires debtors that wish to retain possession of the collateral to do so through either redemption or reaffirmation. “However, a small number of courts have now created a new ride-through option, as in the Coastal FCU case, where the court refuses to approve the reaffirmation agreement, rendering it unenforceable,” McLain explained. He added that these courts reason that where the debtor has complied with the requirements of the bankruptcy code and the only reason the debtor has not performed his or her stated intention of reaffirming the debt is because of the court’s refusal to approve the reaffirmation agreement, the stay will not terminate and the debtor may retain the collateral as long as payments are made pursuant to the terms of the loan agreement. The Coastal and CUNA-NCCUL briefs, filed Feb. 26, also maintain that a creditor should be allowed to repossess collateral where a debtor has not truly reaffirmed a debt because the court fails to approve such a reaffirmation making it unenforceable.

Mica to speak on cooperative advocacy

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WASHINGTON (3/24/08)—Credit Union National Association (CUNA) President/CEO Dan Mica will lead a session on public policy and advocacy for cooperative concerns at the Annual Cooperative Conference here May 1. The conference, conducted by the National Cooperative Business Association (NCBA), will feature speakers on topics such as co-op governance, global accounting standards, public policy and implementing innovative marketing strategies. The Cooperative Conference also is intended to provide an opportunity for cooperative personnel to network with representatives from the full spectrum of cooperatives in the United States. “The annual conference is a keystone event for NCBA and for our members,” said Paul Hazen, NCBA president and CEO. “Our members from all over the country come to D.C. to engage with cooperative-minded leaders, educate themselves and others on the critical issues pertaining to cooperatives, and also build relationships that foster a greater awareness of the value of cooperative business.” In addition to Mica’s session on advocacy for cooperatives, the conference will feature sessions on cooperative governance, global accounting standards, collaboration efforts, and how to build visibility and credibility, among other topics. For more information on NCBA’s Cooperative Conference, use the resource link below.

Webinar for state pandemic flu planning

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WASHINGTON (3/24/08)—The federal government is offering two live webcasts in upcoming weeks to help state planners in their next round of pandemic influenza planning. The webcasts, organized by the U.S. Department of Health and Human Services, will be on April 2 and April 30 and no registration is required. On March, the government issued new guidance for the second round of state pandemic planning assessments. These scheduled webcasts are intended to provide an overview of the guidance and offer an opportunity for a question-and-answer sessions with experts. Interested parties may email questions for the webcast panelists during the program to hhsstudio@hhs.gov, and are asked to include first name and hometown. States and U.S. territories have until June 16 to submit draft operational plans. The draft plans will be reviewed by relevant federal agencies and states will then be allowed to make revisions.