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Inside Washington (04/13/2009)

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* WASHINGTON (4/14/09)--Insolvent financial institutions should be resolved like failed banks have been in the past, Federal Reserve Bank of Kansas City President Thomas Hoenig said Thursday (American Banker April 13). The government has recapitalized banks with private money, which has not helped, he said. Old methods that have helped failed banks in the past could stabilize some institutions. However, a large failed firm would need to be operated as a conservatorship or a bridge organization, he added ... * WASHINGTON (4/14/09)--Social Security benefits for thousands of people with disabilities are being delayed because of state employee layoffs and furloughs, according to Michael J. Astrue, Social Security commissioner (The New York Times April 13). Laying off employees or giving them furloughs does not save states any money, he said. It just delays payments to the disabled, who rely on the funds. The Social Security Administration anticipates that disability claims will rise to more than three million this year, compared with 2.6 million last year. The agency pays $12 billion per month to more than 13 million people ... * WASHINGTON (4/14/09)--Private student lenders and their congressional allies are trying to offset President Barack Obama’s plan to eliminate a subsidized loan program and put the money into scholarships for low-income students (The New York Times April 13). The Congressional Budget Office says the plan would save $94 billion and broaden Pell grants for poor students. Republicans say the plan indicates that the president is trying to expand the government. Democrats are split on the issue. The private loan industry was rescued last year and has begun fighting the plan, saying that the Obama administration is trying to collect profits from federal student loans ...

CDFI certification info sessions start this week

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WASHINGTON (4/14/09)—Credit unions interested in Community Development Financial Institution (CDFI) certification should note the U.S. Treasury Department will be conducting a series of conference calls on the subject. The information sessions, starting this week, are intended to provide a forum for credit unions and other potential CDFI applicants to ask questions directly of CDFI Fund staff about becoming certified. The Treasury Department's CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit. CDFIs are financial intermediaries such as certain credit unions, banks, loan funds, venture capital funds, corporation-based lenders and microenterprise development loan funds. To become certified, Treasury says an organization must: be a legal entity, have an eligible primary mission, be a financing entity, serve an eligible target market, be accountable to the target market, provide corresponding development services, and not be controlled by a government entity. Among other benefits, CDFI certification allows participants to apply for financial assistance through the CDFI Program. The 60-minute information sessions are scheduled for:
* April 16 at 2 p.m. EST; * May 21, 2 p.m. EST; * June 18, 2 p.m. EST; and * July 16, 2 p.m. EST.
To access any of the conference calls, participants must call (202) 927-2255 and enter in the pin number 315646. No prior registration is necessary. The phone number and pin number are the same for all of the conference calls. Use the resource link below for more information about CDFI certification eligibility and the application process.

Land acquisition flexibility effective April 27

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WASHINGTON (4/14/09)—The Credit Union National Association (CUNA) reminds credit unions that they have increased flexibility as of April 27 with regard to acquiring unimproved land for future expansion. Under a rule adopted by the National Credit Union Administration last month, RegFlex-qualifying federal credit unions will have up to six years to occupy unimproved land acquired for expansion, without a waiver. Previously, a RegFlex credit union minimally had to partially occupy the premises within three years or it was required to obtain a waiver from NCUA. In a recently released final rule analysis, CUNA underscores that the rule applies only to unimproved land. The NCUA has said it made the rule change to recognize that "real estate transactions are complex, time consuming, and can involve a host of wide-ranging issues . . . [t]his is especially true in the unimproved land context considering the addition of construction-related issues." A federally insured credit union automatically qualifies for RegFlex classification under 12 C.F.R. part 742 if it has had a composite CAMEL rating of 1 or 2 for its last two examinations and has been "well capitalized" under NCUA rules for the previous six quarters. Use the resource link below to read CUNA’s rule analysis.