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Washington

Parity for CUs at issue in Senate vote says CUNA

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WASHINGTON (3/26/09)—The U.S. Senate voted 49-48 against an amendment Wednesday that would have increased the Federal Deposit Insurance Corp. (FDIC) borrowing authority to as much as $500 billion. The final vote against the bill was, in part, caused by some lawmakers’objection that the amendment was not gemane to the bill being considered, H.R. 1388, which would reauthorize and reform the national service laws. However, Ryan Donovan, vice president of legislative affairs for the Credit Union National Association, said the amendment’s lack of parity for the credit union system also seemed to be at issue for some. "We understand from our conversations with a number of folks on Capitol Hill that one the reasons that the amendment was not agreed to had to do with the fact that a similar remedy for credit unions was not included in the language."

NCUA share insurance TV ads unveiled

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ALEXANDRIA, Va. (3/26/09)—The National Credit Union Administration (NCUA) is set to roll out a 10-week run of a television advertisement featuring a nationally known personal finance expert touting the safety and security of federally insured share deposits. In the 30-second spot, financial journalist Jane Bryant Quinn tells her audience that federally insured credit unions can help them sleep at night by assuring that their funds are safe and insured by the federal government up to $250,000. The commercial is slated to air during this weekend’s NCAA men’s basketball tournament, It will appear weekly, beginning March 29, during the award-winning Sunday Morning with Charles Osgood or Face the Nation broadcasts. From April 30 through May 29, it is scheduled to appear on the CBS early morning news between 5 a.m. and 9 a.m. Monday through Friday. What’s more, after the NCUA launches the TV ad today, it will back it up with a five-month video, print ad and electronic campaign. Television, the Internet, and transit buses will be used to spread the word that member accounts in federally insured credit unions are safe and secure. The NCUA encourages credit unions are encouraged to download commercial, which is available in HD video from NCUA’s website. Use the resource links below.

CUs urged Contact NCUA before corporate action today

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WASHINGTON (3/26/09)—Credit unions are asked to urge each National Credit Union Administration (NCUA) board member to provide greater transparency regarding a report by Pacific Investment Management Company LLC (PIMCO) on corporate credit unions (CCU). In a credit union action alert launched Wednesday, the Credit Union National Association (CUNA) also encouraged credit unions to push the NCUA to approve a mechanism to spread out the costs associated with recent agency actions addressing the corporate system. The NCUA has scheduled a special closed meeting for today that will address CCU issues. The agency is expected to review proposals that will allow the insurance costs to federally insured credit unions associated with NCUA's actions regarding corporate credit unions to be spread out over time. The PIMCO report was the basis, in part, of the NCUA’s most recent action –to conserve two corporate credit unions, U.S. Central FCU, Lenexa, Kan., and Western Corporate FCU (WesCorp), San Dimas, Calif. PIMCO is a PIMCO is a leading global investment management firm. CUNA has requested more information on the PIMCO analysis, but urges credit unions to join in the demand for more information. CUNA said it remains extremely concerned about the impact on credit unions of NCUA's decision Friday to place the two CCus into conservatorship, an action that brings a “huge cost” for the entire credit union system. The NCUA projects these actions raise the initial estimate of the corporate share guarantees from $4.7 billion to $5.9 billion. They likely will also impose additional impairment costs for credit union capital in WesCorp, U.S. Central, and perhaps other corporates. “Email each of the NCUA Board Members TODAY and urge them to approve a mechanism to spread out the costs and direct their staff to provide much more information to the credit union system from the PIMCO report,” CUNA urged.

Inside Washington (03/25/2009)

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* WASHINGTON (3/26/09)--Federal Reserve Board Chairman Ben Bernanke suggested giving more power to the Federal Deposit Insurance Corp. (FDIC) to regulate systemic risk during a House Financial Services Committee hearing Tuesday. The regulator does not have to be the same agency with resolution powers, he added. The Treasury and Fed both submitted proposals to create authority over struggling banks for systemically significant holding companies. House Financial Services Committee Chairman Barney Frank (D-Mass.) is drafting a bill to give the government resolution powers, but did not provide specifics on his legislation at the hearing (American Banker March 25). Treasury Secretary Timothy Geithner is expected to testify today before the Financial Services Committee and observers anticipate that the Obama administration will release more details on a plan to regulate systemic risk ... * WASHINGTON (3/26/09)--The role of CEO over Fannie Mae and Freddie Mac continues to change, and some observers say the position may be irrelevant. James Lockhart, director of the Federal Housing Finance Agency (FHFA), currently serves as conservator over the two enterprises. Fannie CEO Herbert Allison said he controls Fannie’s operations but he views FHFA as the controlling shareholder (American Banker March 25). Lockhart said his agency cannot run the enterprises itself. The CEO’s power will likely center on administrative tasks, according to Bert Ely, consultant in Alexandria, Va. A CEO is needed to run the enterprises, but the role is different than what it used to be--and that may make things simpler, added Brian Gardner, analyst for Keefe, Bruyette and Woods ... * WASHINGTON (3/26/09)--The Senate has confirmed Gov. Gary Locke of Washington as secretary of the Commerce Department. The Senate approved the nomination with a voice vote. President Barack Obama’s first two nominees--Sen. Judd Gregg (R-N.H.) and New Mexico Gov. Bill Richardson--withdrew (The New York Times March 25) ...

New tool added to CUNAs CCU resources

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WASHINGTON (3/26/09)—A video message that underscores the safety and soundness of the credit union system has been added to the Credit Union National Association’s (CUNA) resource center on corporate credit union issues. CUNA President/CEO Dan Mica appears on the video, which credit unions can link to on the CUNA homepage or post on their own websites, In under 60 seconds, Mica reminds listeners:
* The credit union system is well capitalized at close to 11%--significantly above the federal requirement of 7%; * Credit unions are making mortgage loans, auto loans, member business loans and are serving their communities; and * Federally insured share accounts are covered to $250,000.
Mica explains that the recent news of two conservatorships involves corporate—or “wholesale” credit unions. “They have had some difficulties, but they are not the every-day credit unions you and I use,” Mica assures. To get this video tool and the latest information on the National Credit Union Administration's (NCUA) corporate credit union stabilization efforts, click on "NCUA's corporate actions," written in red and boxed for easy access on CUNA’s home page. CUNA members can access:
* All archived News Now articles on the corporates; * CUNA analysis of the NCUA's actions; * Communications tools, such as talking points to help credit union members understand the issues and the new video; * An updated calculator to estimate cost of the NCUA corporate stabilization plan; and more.
Use the resource links below to see the video and to read the available materials.

Obama loan mod program topic of April audio

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WASHINGTON (3/26/09)--Credit unions can learn the benefits of participating in the Obama administration’s “Making Home Affordable Refinance and Modification Program” in an April 2 audio offered by the Credit Union National Association. The administration recently announced the details of its plan, which aims to help up to nine million families refinance their existing mortgage or modify their current loan. The program, announced Feb. 18, seeks to stabilize and strengthen the housing sector. Borrowers have two options to reduce their mortgage payments under the plan. One focuses on borrowers who are current on their payments but have not refinanced or taken advantage of lower interest rates because their home has decreased in value. The other option aims to help borrowers who are behind on their payments. During the audio, credit unions can:
* Hear about the structure and requirements of the new program from agency experts; * Explore the loan refinance program and understand how borrowers can refinance if a loan is owned or securitized by Freddie Mac and Fannie Mae, even if the loan balance is more than 80% of the current market value of the home and as long as the balance is no more than 105% of the market value; * Examine the loan modification option and how it’s geared to members who are behind or struggling to make their mortgage loan payments; and * Learn the requirements of each program, which members qualify, and the benefits to credit unions and members for participating in this program.
Industry experts scheduled to speak in the webinar include Laurie Maggiano, senior policy advisor in the Office of Financial Stability at the Department of Treasury, and representatives from Fannie Mae and Freddie Mac. For more information, use the links.

Audio Tuesday addresses COBRA under stimulus act

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WASHINGTON (3/26/09)--A Tuesday audio, “New COBRA Requirements Under the Stimulus Act: Are You Ready?” by the Credit Union National Association Center for Professional Development, will inform credit unions about changes to the Consolidated Omnibus Budget Reconciliation Act (COBRA) under the Obama administration’s stimulus plan. One COBRA change that will be noted in the audio is that Assistance Eligible Individuals (AEI) can receive a 65% subsidy of premiums they pay for group health continuation coverage for up to nine months. The subsidy is first paid by the employer, which then may recover it from the government by an offset in the payroll taxes it pays. The audio--led by Jeffrey Storch, industry expert with Boardman, Suhr Curry and Field LLP--also will provide information for credit unions on how to identify AEIs, provide the new required COBRA subsidy notice, and how to determine the subsidy amount and receive reimbursement. “Are You Ready?” will begin at 2 p.m. CT. For more information, use the link.